----

| Commission File Number:  0-25203                     |
|----------------------------------------------------------------|
|                                                           |
| OmniComm Systems, Inc.                                         |
| (Exact name of registrant as specified in its Charter)         |
|                                                           |   |
|                                                           |   |
| Delaware                                                       | 11-3349762 |
| (State or other jurisdiction of Incorporation or organization) | (IRS Employer Identification Number) |
|                                                           |   |
| 2101 W. Commercial Blvd. Suite 3500, Ft. Lauderdale, FL        | 33309 |
| Address of principal executive offices                         | Zip Code |
|                                                           |   |
| 954.473.1254                                                   |
| (Registrant’s Telephone Number including area code)      |

| Large accelerated filer                                          | [ ] | Accelerated filer         | [ ]       |
|------------------------------------------------------------------|-----|---------------------------|-----------|
| Non-accelerated filer(Do not check if smaller reporting company) | [ ] | Smaller reporting company | [√] |

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|   |                                                                                                                                                                                                              |                                                                                   |           |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|----------------|--------|
|   |                                                                                                                                                                                                              |                                                                                   | Page No.       |   |
|   | PART I. - FINANCIAL INFORMATION                                                                                                                                                                                   |                                                                                   |
|   | Item 1.                                                                                                                                                                                                           | Financial Statements (unaudited)                                                       | 3    |   |
|   | Item 2.                                                                                                                                                                                                           | Management's Discussion and Analysis of Financial Condition and Results of Operations. | 29   |   |
|   | Item 3.                                                                                                                                                                                                           | Quantitative and Qualitative Disclosures About Market Risk.                            | 43   |   |
|   | Item 4.                                                                                                                                                                                                           | Controls and Procedures.                                                               | 43   |   |
|   | PART II - OTHER INFORMATION                                                                                                                                                                                       |                                                                                   |
|   | Item 1.                                                                                                                                                                                                           | Legal Proceedings.                                                                     | 45   |   |
|   | Item 1A.                                                                                                                                                                                                          | Risk Factors.                                                                          | 45   |   |
|   | Item 2.                                                                                                                                                                                                           | Unregistered Sales of Equity Securities and Use of Proceeds.                           | 45   |   |
|   | Item 3.                                                                                                                                                                                                           | Defaults Upon Senior Securities.                                                       | 45   |   |
|   | Item 4.                                                                                                                                                                                                           | Removed and Reserved.                                                                  | 45   |   |
|   | Item 5.                                                                                                                                                                                                           | Other Information.                                                                     | 45   |   |
|   | Item 6.                                                                                                                                                                                                           | Exhibits.                                                                              | 45   |   |
|   | SIGNATURES                                                                                                                                                                                                        |
|   | Exhibit 10.44 Promissory Note dated March 31, 2011 to Cornelis F. Wit                                                                                                                                             |
|   | Exhibit 10.45 to Noesis International Holdings dated February 1, 2011                                                                                                                                             |
|   | Exhibit 31.1  Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002– CEO Cornelis F. Wit                                                         |
|   | Exhibit 31.2  Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002– CFO Ronald T. Linares                                                       |
|   | Exhibit 32.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 –Principal Executive Officer and Principal Financial Officer |

----

| OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES |
|-----------------------------------------|
| CONSOLIDATED BALANCE SHEETS             |

|                                                                                                                                                                                                               |   | March 31, 2011 |        |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|--------|-------------------|--------|
|                                                                                                                                                                                                               |   | (unaudited)    |        |   |              |   |
| ASSETS                                                                                                                                                                                                             |   |
| CURRENT ASSETS                                                                                                                                                                                                     |   |           |        |   |              |   |
| Cash                                                                                                                                                                                                               |   | $              | 138,609     |   |              | $      | 1,213,397 |   |
| Accounts receivable, net of allowance for doubtful accounts of $269,869 and $269,869 in 2011 and 2010, respectively                                                                                                |   |           | 1,165,884   |   |              |   | 1,031,745 |   |
| Prepaid expenses                                                                                                                                                                                                   |   |           | 142,167     |   |              |   | 97,337 |   |
| Total current assets                                                                                                                                                                                               |   |           | 1,446,660   |   |              |   | 2,342,479 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| PROPERTY AND EQUIPMENT, net                                                                                                                                                                                        |   |           | 964,309     |   |              |   | 1,046,688 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| OTHER ASSETS                                                                                                                                                                                                       |   |           |        |   |              |   |   |   |
| Intangible assets, net                                                                                                                                                                                             |   |           | 580,292     |   |              |   | 696,350 |   |
| Other assets                                                                                                                                                                                                       |   |           | 35,367      |   |              |   | 34,218 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                                       |   | $              | 3,026,628   |   |              | $      | 4,119,735 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS' (DEFICIT)                                                                                                                                                                            |   |
| CURRENT LIABILITIES                                                                                                                                                                                                |   |           |        |   |              |   |   |   |
| Accounts payable and accrued expenses                                                                                                                                                                              |   | $              | 1,283,112   |   |              | $      | 1,371,703 |   |
| Notes payable, current portion                                                                                                                                                                                     |   |           | -0-         |   |              |   | 12,500 |   |
| Notes payable related parties, current portion                                                                                                                                                                     |   |           | 20,000      |   |              |   | 2,615,000 |   |
| Deferred revenue, current portion                                                                                                                                                                                  |   |           | 4,105,658   |   |              |   | 4,060,425 |   |
| Conversion feature liability, related parties, current portion                                                                                                                                                     |   |           | 1,170,200   |   |              |   | 92,134 |   |
| Conversion feature liability, current portion                                                                                                                                                                      |   |           | 27,800      |   |              |   | 72 |   |
| Convertible notes payable,  current portion, net of discount                                                                                                                                             |   |           | 219,766     |   |              |   | 395,733 |   |
| Convertible notes payable, related parties, current portion, net of discount                                                                                                                                       |   |           | 2,389,274   |   |              |   | 2,169,622 |   |
| Patent settlement liability, current portion                                                                                                                                                                       |   |           | 887,499     |   |              |   | 765,089 |   |
| Warrant liability, related parties                                                                                                                                                                                 |   |           | 2,801,607   |   |              |   | 206,760 |   |
| Warrant liability                                                                                                                                                                                                  |   |           | 443,177     |   |              |   | 54,388 |   |
| Total current liabilities                                                                                                                                                                                          |   |           | 13,348,093  |   |              |   | 11,743,426 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| Notes payable - long term, net of current portion                                                                                                                                                                  |   |           | 601,286     |   |              |   | 601,286 |   |
| Notes payable related parties, long term, net of current portion, net of discount                                                                                                                                  |   |           | 1,825,518   |   |              |   | 409,379 |   |
| Deferred revenue, long term, net of current portion                                                                                                                                                                |   |           | 547,811     |   |              |   | 691,234 |   |
| Convertible notes payable, related parties, net of current portion                                                                                                                                                 |   |           | 6,900,000   |   |              |   | 6,900,000 |   |
| Patent settlement liability - long term, net of current portion                                                                                                                                                    |   |           | 1,461,109   |   |              |   | 1,588,439 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                                                                  |   |           | 24,683,817  |   |              |   | 21,933,764 |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES (See Note 11)                                                                                                                                                                        |   |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| SHAREHOLDERS' (DEFICIT)                                                                                                                                                                                            |   |           |        |   |              |   |   |   |
|  Preferred stock, $0.001 par value, 10,000,000 share authorized 4,022,500 shares undesignated                                                                                                                 |   |           | -0-         |   |              |   | -0- |   |
| Series B convertible preferred stock - 230,000 shares authorized, -0- and -0- issued and outstanding, respectively at $.001 par value; liquidation preference $-0- and $-0-, respectively                     |   |           | -0-         |   |              |   | -0- |   |
| Series C convertible preferred stock - 747,500 shares authorized, -0- and -0- issued and outstanding, respectively at $.001 par value;liquidation preference $-0- and $-0-, respectively                      |   |           | -0-         |   |              |   | -0- |   |
| Series A convertible preferred stock - 5,000,000 shares authorized, 4,125,224 and 4,125,224 issued and outstanding, respectively at $.001 par value liquidation preference $4,125,224 and $4,125,224, respectively |   |           | 4,125       |   |              |   | 4,125 |   |
| Series D preferred stock - 250,000 shares authorized, 250,000 and 250,000 issued andoutstanding, respectively at     $.001 par value                                                                |   |           | 250         |   |              |   | 250 |   |
| Common stock - 250,000,000 shares authorized, 86,081,495 and 86,081,495 issued and outstanding, respectively,    at $.001 par value                                                                      |   |           | 86,082      |   |              |   | 86,082 |   |
|     Additional paid in capital - preferred                                                                                                                                                     |   |           | 4,717,804   |   |              |   | 4,717,804 |   |
|     Additional paid in capital - common                                                                                                                                                        |   |           | 36,463,606  |   |              |   | 36,906,356 |   |
| Less cost of treasury stock: Common - -0- and 1,014,830 shares, respectively                                                                                                                                       |   |           | -0-         |   |              |   | (503,086 | ) |
|      Accumulated other comprehensive (loss)                                                                                                                                                    |   |           | (33,873     | )      |              |   | (24,298 | ) |
|      Accumulated deficit                                                                                                                                                                       |   |           | (62,895,183 | )      |              |   | (59,001,262 | ) |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| TOTAL SHAREHOLDERS' (DEFICIT)                                                                                                                                                                                      |   |           | (21,657,189 | )      |              |   | (17,814,029 | ) |
|                                                                                                                                                                                                               |   |           |        |   |              |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)                                                                                                                                                                 |   | $              | 3,026,628   |   |              | $      | 4,119,735 |   |

----

| OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES         |
|-------------------------------------------------|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (unaudited)                                     |

|                                                    |   | For the three months ended |       |
|---------------------------------------------------------|--------|----------------------------|------------|
|                                                    |   | March 31,                  |       |
|                                                    |   | 2011                       |       |   | 2010 |   |
| Total revenues                                          |   | $                          | 3,314,668  |   |   | $ | 2,697,363 |   |
|                                                    |   |                       |       |   |   |   |   |   |
| Cost of sales                                           |   |                       | 446,055    |   |   |   | 434,871 |   |
|                                                    |   |                       |       |   |   |   |   |   |
| Gross margin                                            |   |                       | 2,868,613  |   |   |   | 2,262,492 |   |
|                                                    |   |                       |       |   |   |   |   |   |
| Operating expenses                                      |   |                       |       |   |   |   |   |   |
| Salaries, benefits and related taxes                    |   |                       | 2,098,741  |   |   |   | 2,685,750 |   |
| Rent  & occupancy expenses                |   |                       | 225,037    |   |   |   | 200,734 |   |
| Consulting services                                     |   |                       | 50,178     |   |   |   | 210,724 |   |
| Legal and professional fees                             |   |                       | 136,130    |   |   |   | 85,516 |   |
| Travel                                                  |   |                       | 120,508    |   |   |   | 125,254 |   |
| Telephone and internet                                  |   |                       | 66,917     |   |   |   | 83,204 |   |
| Selling, general and administrative                     |   |                       | 285,967    |   |   |   | 241,017 |   |
| Bad debt expense                                        |   |                       | -          |   |   |   | 13,954 |   |
| Depreciation Expense                                    |   |                       | 126,557    |   |   |   | 125,928 |   |
| Amortization Expense                                    |   |                       | 116,058    |   |   |   | 116,058 |   |
| Total operating expenses                                |   |                       | 3,226,093  |   |   |   | 3,888,139 |   |
|                                                    |   |                       |       |   |   |   |   |   |
| Operating loss                                          |   |                       | (357,480   | ) |   |   | (1,625,647 | ) |
| Other income (expense)                                  |   |                       |       |   |   |   |   |   |
| Interest expense                                        |   |                       | (271,613   | ) |   |   | (697,265 | ) |
| Interest expense, related parties                       |   |                       | (358,990   | ) |   |   | (273,243 | ) |
| Interest income                                         |   |                       | 388        |   |   |   | 47 |   |
| Change in derivative liabilities                        |   |                       | (2,910,570 | ) |   |   | 1,075,994 |   |
| Other Comprehensive Income (Loss)                       |   |                       | 4,342      |   |   |   | -0- |   |
| Loss before income taxes and preferred dividends        |   |                       | (3,893,923 | ) |   |   | (1,520,114 | ) |
| Net loss                                                |   |                       | (3,893,923 | ) |   |   | (1,520,114 | ) |
| Preferred stock dividends                               |   |                       |       |   |   |   |   |   |
| Preferred stock dividends in arrears                    |   |                       |       |   |   |   |   |   |
|       Series A Preferred  |   |                       | (50,720    | ) |   |   | (50,720 | ) |
| Total preferred stock dividends                         |   |                       | (50,720    | ) |   |   | (50,720 | ) |
| Net  loss attributable to common shareholders |   | $                          | (3,944,643 | ) |   | $ | (1,570,834 | ) |
|                                                    |   |                       |       |   |   |   |   |   |
| Net loss per share                                      |   |                       |       |   |   |   |   |   |
| Basic and Diluted                                       |   | $                          | (0.05      | ) |   | $ | (0.02 | ) |
| Weighted average number of shares outstanding           |   |                       |       |   |   |   |   |   |
| Basic and Diluted                                       |   |                       | 86,081,495 |   |   |   | 85,507,699 |   |

----

| OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES                     |
|-------------------------------------------------------------|
| CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) |
| FOR THE PERIOD JANUARY 1, 2010 TO March 31, 2011            |
| (unaudited)                                                 |

|                                           |   |            |       |            |   |                     |    | Preferred Stock         |       |
|------------------------------------------------|--------|-----------------|------------|-----------------|--------|--------------------------|---------|-------------------------|------------|
|                                           |   | Common Stock    |       |            |   | 5% Series A Convertible  |    | 8% Series B Convertible |       | 8% Series C Convertible |   |
|                                           |   | Numberof Shares |       | $0.001Par Value |   | AdditionalPaid InCapital |    | Numberof Shares         |       | $0.001Par Value |   | AdditionalPaid InCapital |   | Numberof Shares |   | $0.001Par Value |   | AdditionalPaid InCapital |   | Numberof Shares |   | $0.001Par Value |   | AdditionalPaid InCapital |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2009                  |   |            | 85,507,699 |            | $      | 86,474                   |    | $                       | 36,278,798 |   |   | 4,125,224 |   | $ | 4,125 |   | $ | 3,718,054 |   | $ | -0- |   | $ | -0- |   | $ | -0- |   | $ | -0- |   | $ | -0- |   | $ | -0- |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee stock option expense                  |   |            |       |            |   |                     |    |                    | 584,061    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in lieu of salaries        |   |            | 573,796    |            |   | 574                      |    |                    | 42,531     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment for treasury stock transactions     |   |            |       |            |   | (966                     | )  |                    | 966   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment        |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of Series D preferred stock           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Correcting entry to retained earnings          |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the period ended Deember 31, 2010 |   |            | -          |            |   | -                        |    |                    | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2010                  |   |            | 86,081,495 |            |   | 86,082                   |    |                    | 36,906,356 |   |   | 4,125,224 |   |   | 4,125 |   |   | 3,718,054 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 0 |   |   | 0 |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee stock option expense                  |   |            |       |            |   |                     |    |                    | 60,336     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury stock retired                         |   |            |       |            |   |                     |    |                    | (503,086   | )  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment        |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the period ended March 31, 2011   |   |            | -          |            |   | -                        |    |                    | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                           |   |            |       |            |   |                     |    |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at March 31, 2011                     |   |            | 86,081,495 |            | $      | 86,082                   |    | $                       | 36,463,606 |   |   | 4,125,224 |   | $ | 4,125 |   | $ | 3,718,054 |   |   | - |   | $ | -0- |   | $ | -0- |   | $ | -0- |   | $ | -0- |   | $ | -0- |   |

|                                            |   | Series D Preferred Stock |    |   |            |   |   | Other                    |   |   |               |   |   |                            |        |
|-------------------------------------------------|--------|--------------------------|---------|--------|-----------------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|---------------------------------|-------------|
|                                            |   | Numberof Shares          |    |   | $0.001Par Value |   |   | AdditionalPaid InCapital |   |   | AccumulatedDeficit |   |   | Accumulated ComprehensiveIncome |        |   | TreasuryStock |   |   | Shareholders'Equity(Deficit) |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |
| Balances at December 31, 2009                   |   | $                        | -0-     |   |            | $      | -0-    |                     |   | $      | -0-                |   |   | $                               | (55,870,527 | ) |   | $ | 2,934 |   |   | $ | (503,086 | ) |   | $ | (16,283,228 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee stock option expense                   |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | 584,061 |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in lieu of salaries         |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | 43,105 |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment for treasury stock transactions      |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | -0- |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment         |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   | (27,232 | ) |   |   |   |   |   |   | (27,232 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of Series D preferred stock            |   |                     | 250,000 |   |            |   | 250    |                     |   |   | 999,750            |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | 1,000,000 |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Correcting entry to retained earnings           |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | -0- |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the period ended December 31, 2010 |   |                     | -       |   |            |   | -      |                     |   |   | -                  |   |   |                            | (3,130,735  | ) |   |   | - |   |   |   | - |   |   |   | (3,130,735 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2010                   |   |                     | 250,000 |   |            |   | 250    |                     |   |   | 999,750            |   |   |                            | (59,001,262 | ) |   |   | (24,298 | ) |   |   | (503,086 | ) |   |   | (17,814,029 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee stock option expense                   |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   | 60,336 |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury stock retired                          |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   | 503,086 |   |   |   | -0- |   |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment         |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   | (9,575 | ) |   |   |   |   |   |   | (9,575 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the period ended March 31, 2011    |   |                     | -       |   |            |   | -      |                     |   |   | -                  |   |   |                            | (3,893,921  | ) |   |   | - |   |   |   | - |   |   |   | (3,893,921 | ) |
|                                            |   |                     |    |   |            |   |   |                     |   |   |               |   |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at March 31, 2011                      |   |                     | 250,000 |   |            | $      | 250    |                     |   | $      | 999,750            |   |   | $                               | (62,895,183 | ) |   | $ | (33,873 | ) |   | $ | -0- |   |   | $ | (21,657,189 | ) |

----

| OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES         |
|-------------------------------------------------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (unaudited)                                     |

|                                                                                    |   | For the three months ended |       |
|-----------------------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                                    |   | March 31,                  |       |
|                                                                                    |   | 2011                       |       |   | 2010 |   |
|                                                                                    |   |                       |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                    |   |                       |       |   |
| Net loss                                                                                |   | $                          | (3,893,923 | ) |   | $ | (1,520,114 | ) |
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities |   |                       |       |   |   |
| Gain on extinguishment of debt                                                          |   |                       | -0-        |   |   |   | -0- |   |
| Change in derivative liabilities                                                        |   |                       | 2,910,570  |   |   |   | (1,075,994 | ) |
| Interest expense from derivative instruments                                            |   |                       | 243,685    |   |   |   | 671,477 |   |
| Employee stock option expense                                                           |   |                       | 60,336     |   |   |   | 129,787 |   |
| Depreciation and amortization                                                           |   |                       | 242,615    |   |   |   | 241,987 |   |
| Bad debt expense                                                                        |   |                       | -0-        |   |   |   | -0- |   |
| Changes in operating assets and liabilities                                             |   |                       |       |   |   |   |   |   |
| Accounts receivable                                                                     |   |                       | (134,139   | ) |   |   | 1,087,611 |   |
| Prepaid expenses                                                                        |   |                       | (44,831    | ) |   |   | (32,890 | ) |
| Other assets                                                                            |   |                       | (1,149     | ) |   |   | (8,453 | ) |
| Accounts payable and accrued expenses                                                   |   |                       | (88,589    | ) |   |   | 45,923 |   |
| Patent settlement liability                                                             |   |                       | (4,919     | ) |   |   | 41,272 |   |
| Deferred revenue                                                                        |   |                       | (98,190    | ) |   |   | 670,705 |   |
| Net cash provided by (used in) operating activities                                     |   |                       | (808,534   | ) |   |   | 251,311 |   |
|                                                                                    |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                    |   |                       |       |   |   |
| Purchase of property and equipment                                                      |   |                       | (44,179    | ) |   |   | (164,055 | ) |
| Net cash used in investing activities                                                   |   |                       | (44,179    | ) |   |   | (164,055 | ) |
|                                                                                    |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                    |   |                       |       |   |   |
| Repayments of notes payable                                                             |   |                       | (212,500   | ) |   |   | -0- |   |
| Net cash used in financing activities                                              |   |                       | (212,500   | ) |   |   | -0- |   |
|                                                                                    |   |                       |       |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                 |   |                       | (9,575     | ) |   |   | (9,043 | ) |
| Net increase (decrease) in cash                                                         |   |                       | (1,074,788 | ) |   |   | 78,213 |   |
| Cash at beginning of period                                                             |   |                       | 1,213,397  |   |   |   | 60,352 |   |
|                                                                                    |   |                       |       |   |   |   |   |   |
| Cash at end of period                                                                   |   | $                          | 138,609    |   |   | $ | 138,565 |   |
|                                                                                    |   |                       |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                      |   |                       |       |   |   |
| Cash paid during the period for:                                                        |   |                       |       |   |   |   |   |   |
| Income taxes                                                                            |   | $                          | -0-        |   |   | $ | -0- |   |
| Interest                                                                                |   | $                          | 395,352    |   |   | $ | 279,218 |   |

----

| OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES         |
|-------------------------------------------------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (continued)                                     |
| (unaudited)                                     |

|                                                                   |   | For the three months ended |      |
|------------------------------------------------------------------------|--------|----------------------------|-----------|
|                                                                   |   | March 31,                  |      |
|                                                                   |   | 2011                       |      |   | 2010 |   |
|                                                                   |   |                       |      |   |   |   |
| Non-cash transactions                                                  |   |                       |      |   |   |   |
| Notes payable issued in exchange for existing  notes payable |   | $                          | 3,004,379 |   |   | $ | -0- |   |
| Notes payable issued for matured convertible note payable              |   | $                          | 1,200,000 |   |   | $ | -0- |   |

----

| NOTE 1: | ORGANIZATION AND NATURE OF OPERATIONS |
|---------|---------------------------------------|

----

----

----

|                        |   | For the three months ended |      |
|-----------------------------|--------|----------------------------|-----------|
|                        |   | March 31, 2011             |      |   | March 31, 2010 |   |
| Set-up Fees                 |   | $                          | 755,555   |   |   | $ | 897,493 |   |
| Change Orders               |   |                       | 77,881    |   |   |   | 27,960 |   |
| Maintenance                 |   |                       | 1,433,479 |   |   |   | 1,062,834 |   |
| Software Licenses           |   |                       | 819,054   |   |   |   | 336,315 |   |
| Professional Services       |   |                       | 97,007    |   |   |   | 225,317 |   |
| Hosting & Subscriptions |   |                       | 131,692   |   |   |   | 147,444 |   |
| Totals                      |   | $                          | 3,314,668 |   |   | $ | 2,697,363 |   |

|                |   | For the periods ended |    |
|---------------------|--------|-----------------------|---------|
|                |   | March 31, 2011        |    |   | December 31, 2010 |   |
| Beginning of period |   | $                     | 269,869 |   |   | $ | 267,526 |   |
| Bad debt expense    |   |                  | -0-     |   |   |   | 13,954 |   |
| Write-offs          |   |                  | -0-     |   |   |   | (11,611 | ) |
| End of period       |   | $                     | 269,869 |   |   | $ | 269,869 |   |

----

|                 |   | Revenues       |   |   | Accounts Receivable          |   |
|----------------------|--------|----------------|--------|--------|------------------------------|--------|
| For the Period ended |   | # of Customers |   |   | Percentage of Total Revenues |   |   | # of Customers |   |   | Percentage of Total Revenues |   |
| March 31, 2011       |   |           | 2      |   |                         |   | 32 | % |   |   | 2 |   |   |   | 22 | % |
| December 31, 2010    |   |           | 1      |   |                         |   | 20 | % |   |   | 3 |   |   |   | 44 | % |
| March 31, 2010       |   |           | 1      |   |                         |   | 19 | % |   |   | 2 |   |   |   | 29 | % |

| European Revenues                                                                                                                                                                                                                                        |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| for the three months ended                                                                                                                                                                                                                               |   |
| March 31, 2011                                                                                                                                                                                                                                           |   |   | March 31, 2010 |   |
| European Revenues                                                                                                                                                                                                                                        |   |   | % of Total Revenues |   |   | European Revenues |   |   | % of Total Revenues |   |
|  $                                       913,910 |   |   |   | 27.6 | % |   | $ | 376,825 |   |   |   | 14.0 | % |

----

----

----

----

| Anti-Dilutive Security               |   | March 31, 2011 |       |   | March 31, 2010 |   |
|--------------------------------------|--------|----------------|------------|--------|----------------|--------|
| Preferred stock                      |   |           | 2,750,149  |   |           |   | 2,750,149 |   |
| Employee stock options               |   |           | 11,557,000 |   |           |   | 12,286,500 |   |
| Warrants                             |   |           | 52,195,758 |   |           |   | 40,808,241 |   |
| Convertible notes                    |   |           | 24,620,000 |   |           |   | 27,200,000 |   |
| Shares issuable for accrued interest |   |           | 553,870    |   |           |   | 626,855 |   |
|                                 |   |           |       |   |           |   |   |   |
| Total                                |   |           | 91,676,777 |   |           |   | 83,671,745 |   |

| For the three months ended    |   |
|-------------------------------|--------|
|                          |   | March 31, 2011 |   |   | March 31, 2010 |   |
|                          |   | Income (loss) |   |   | Shares |   |   | Per-Share |   |   | Income (loss) |   |   | Shares |   |   | Per-Share |   |
|                          |   | Numerator |   |   | Denominator |   |   | Amount |   |   | Numerator |   |   | Denominator |   |   | Amount |   |
| Basic EPS                     |   | $ | (3,944,643 | ) |   | $ | 86,081,495 |   |   | $ | (0.05 | ) |   | $ | (1,570,834 | ) |   | $ | 85,507,699 |   |   | $ | (0.02 | ) |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of Dilutive Securities |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| None.                         |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted EPS                   |   | $ | (3,944,643 | ) |   | $ | 86,081,495 |   |   | $ | (0.05 | ) |   | $ | (1,570,834 | ) |   | $ | 85,507,699 |   |   | $ | (0.02 | ) |

----

|   | Property and equipment consists of the following: |
|--------|---------------------------------------------------|

|                            |   | March 31, 2011 |      |   | December 31, 2010        |   |      |
|---------------------------------|--------|----------------|-----------|--------|--------------------------|--------|-----------|
|                            |   | Cost           |      |   | Accumulated Depreciation |   |      | Net Book Value |   |   | Cost |   |   | Accumulated Depreciation |   |   | Net Book Value |   | Estimated Useful Lives |
| Computer & Office Equipment |   |           | 1,494,679 |   |                     | $      | 960,873   |   |   |   | 533,806 |   |   | $ | 1,466,187 |   |   | $ | 914,016 |   |   | $ | 552,171 |   | 5 Years |
| Leasehold Improvements          |   |           | 75,476    |   |                     |   | 55,115    |   |   |   | 20,361 |   |   |   | 84,313 |   |   |   | 51,212 |   |   |   | 33,101 |   | 5 Years |
| Computer Software               |   |           | 1,393,501 |   |                     |   | 1,013,628 |   |   |   | 379,873 |   |   |   | 1,366,955 |   |   |   | 937,141 |   |   |   | 429,814 |   | 3 Years |
| Office Furniture                |   |           | 107,687   |   |                     |   | 77,418    |   |   |   | 30,269 |   |   |   | 106,759 |   |   |   | 75,157 |   |   |   | 31,602 |   | 5 Years |
|                            |   | $              | 3,071,343 |   |                     | $      | 2,107,034 |   |   | $ | 964,309 |   |   | $ | 3,024,214 |   |   | $ | 1,977,526 |   |   | $ | 1,046,688 |   |   |

|   | Intangible assets consists of the following: |
|--------|----------------------------------------------|

|           |   | March 31, 2011 |      |   | December 31, 2010        |   |    |
|----------------|--------|----------------|-----------|--------|--------------------------|--------|---------|
|  Asset    |   | Cost           |      |   | Accumulated Amortization |   |    | Net Book Value |   |   | Cost |   |   | Accumulated Amortization |   |   | Net Book Value |   | Estimated Useful Lives |
| Customer lists |   | $              | 1,392,701 |   |                     | $      | 812,409 |   |   | $ | 580,292 |   |   | $ | 1,392,701 |   |   | $ | 696,351 |   |   | $ | 696,350 |   | 3 Years |
|           |   | $              | 1,392,701 |   |                     | $      | 812,409 |   |   | $ | 580,292 |   |   | $ | 1,392,701 |   |   | $ | 696,351 |   |   | $ | 696,350 |   |   |

| 2011   |   | $      | 348,175 |   |
|--------|--------|--------|---------|--------|
| 2012   |   |   | 232,117 |   |
| 2013   |   |   | -0-     |   |
| 2014   |   |   | -0-     |   |
| 2015   |   |   | -0-     |   |
|   |   |   |    |   |
| Total  |   | $      | 580,292 |   |

| Account                                     |   | March 31, 2011 |      |   | December 31, 2010 |   |
|---------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
| Accounts payable                            |   | $              | 608,666   |   |              | $      | 629,775 |   |
| Accrued payroll and related costs           |   |           | 208,898   |   |              |   | 179,331 |   |
| Other accrued expenses                      |   |           | 70,667    |   |              |   | 159,294 |   |
| Accrued interest                            |   |           | 394,881   |   |              |   | 403,303 |   |
|                                        |   |           |      |   |              |   |   |   |
| Total Accounts Payable and Accrued Expenses |   | $              | 1,283,112 |   |              | $      | 1,371,703 |   |

----

|        |       |   |     |   |   | Ending    |   |      | Non-Related Party |   |   | Related Party |   |
|-------------|------------|--------|----------|--------|--------|-----------|--------|-----------|-------------------|--------|--------|---------------|--------|
| Origination | Maturity   |   | Interest |   |   | Principal |   |      |              |   |   | Long          |   |   |   |   |   | Long |   |
| Date        | Date       |   | Rate     |   |   | 3/31/2011 |   |      | Current           |   |   | Term          |   |   | Current |   |   | Term |   |
| 12/31/2010  | 7/1/2012   |   |     | 12     | %      |      | $      | 51,800    |              |   |   | -0-           |   |   | $ | 51,800 |   |   |   | -0- |   |   |   | -0- |   |
| 12/31/2010  | 7/1/2012   |   |     | 12     | %      |      |   | 60,000    |              |   |   | -0-           |   |   |   | 60,000 |   |   |   | -0- |   |   |   | -0- |   |
| 2/1/2011    | 4/1/2013   |   |     | 12     | %      |      |   | 137,500   |              |   |   | -0-           |   |   |   | -0- |   |   |   | -0- |   |   |   | 137,500 |   |
| 12/31/2010  | 12/31/2011 |   |     | 12     | %      |      |   | 20,000    |              |   |   | -0-           |   |   |   | -0- |   |   |   | 20,000 |   |   |   | -0- |   |
| 12/31/2010  | 4/1/2012   |   |     | 12     | %      |      |   | 37,500    |              |   |   | -0-           |   |   |   | 37,500 |   |   |   | -0- |   |   |   | -0- |   |
| 12/16/2010  | 12/16/2012 |   |     | 12     | %      |      |   | 20,000    |              |   |   | -0-           |   |   |   | 20,000 |   |   |   | -0- |   |   |   | -0- |   |
| 12/31/2010  | 1/1/2013   |   |     | 10     | %      |      |   | 308,561   |              |   |   | -0-           |   |   |   | 308,561 |   |   |   | -0- |   |   |   | -0- |   |
| 12/31/2010  | 1/1/2013   |   |     | 10     | %      |      |   | 123,425   |              |   |   | -0-           |   |   |   | 123,425 |   |   |   | -0- |   |   |   | -0- |   |
| 3/31/2011   | 4/1/2014   |   |     | 12     | %      |      |   | 2,866,879 |              |   |   | -0-           |   |   |   | -0- |   |   |   | -0- |   |   |   | 2,866,879 |   |
|        |       |   |     |   |   |      |   |      |              |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        |       |   |     |   |   |      | $      | 3,625,665 |              |   | $      | -             |   |   | $ | 601,286 |   |   | $ | 20,000 |   |   | $ | 3,004,379 |   |

|             |   |         |   |   |              |   |       |              |   |   |              |   |   |              |      |   |             |   |      |               |   |   | Carrying Amount |   |
|------------------|--------|--------------|--------|--------|-------------------|--------|------------|-------------------|--------|--------|-------------------|--------|--------|-------------------|-----------|--------|------------------|--------|-----------|--------------------|--------|--------|-----------------|--------|
|             |   |         |   |   |              |   |       | Principal at |   |   |              |   |   | Total             |      |   | Discount at |   |      | Carrying Amount at |   |   | Short Term      |   |   | Long Term |   |
| Date of Issuance |   | InterestRate |   |   | OriginalPrincipal |   |       | March 31, 2011    |   |   | AllocatedDiscount |   |   | DiscountAmortized |      |   | March 31, 2011   |   |      | March 31, 2011     |   |   | Related         |   |   | Non Related |   |   | Related |   |   | Non Related |   |
| Aug-01-1999      |   |         | 10     | %      |              | $      | 862,500    |              |   | $      | 75,000            |   |   | $                 | -0-       |   |             | $      | -0-       |               |   | $      | -0-             |   |   | $ | 75,000 |   |   | $ | -0- |   |   | $ | 75,000 |   |   | $ | -0- |   |   | $ | -0- |   |
| Aug-29-2008      |   |         | 10     | %      |              |   | 2,270,000  |              |   |   | 1,920,000         |   |   |              | 2,052,080 |   |             |   | 2,052,080 |               |   |   | -0-             |   |   |   | 1,920,000 |   |   |   | -0- |   |   |   | -0- |   |   |   | 1,920,000 |   |   |   | -0- |   |
| Dec-16-2008      |   |         | 12     | %      |              |   | 4,980,000  |              |   |   | 4,980,000         |   |   |              | 1,370,250 |   |             |   | 1,370,250 |               |   |   | -0-             |   |   |   | 4,980,000 |   |   |   | -0- |   |   |   | -0- |   |   |   | 4,980,000 |   |   |   | -0- |   |
| Sep-30-2009      |   |         | 12     | %      |              |   | 1,400,000  |              |   |   | 1,200,000         |   |   |              | 526,400   |   |             |   | 526,400   |               |   |   | -0-             |   |   |   | 1,200,000 |   |   |   | 1,100,000 |   |   |   | 100,000 |   |   |   | -0- |   |   |   | -0- |   |
| Dec-31-2009      |   |         | 12     | %      |              |   | 1,490,000  |              |   |   | 1,490,000         |   |   |              | 935,720   |   |             |   | 779,760   |               |   |   | 155,960         |   |   |   | 1,334,040 |   |   |   | 1,289,274 |   |   |   | 44,766 |   |   |   | -0- |   |   |   | -0- |   |
|             |   |         |   |   |              |   |       |              |   |   |              |   |   |              |      |   |             |   |      |               |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Totals     |   |         |   |   |              | $      | 11,002,500 |              |   | $      | 9,665,000         |   |   | $                 | 4,884,450 |   |             | $      | 4,728,490 |               |   | $      | 155,960         |   |   | $ | 9,509,040 |   |   | $ | 2,389,274 |   |   | $ | 219,766 |   |   | $ | 6,900,000 |   |   | $ | -0- |   |

----

| 2011   |   | $      | 1,565,000 |   |
|--------|--------|--------|-----------|--------|
| 2012   |   |   | -0-       |   |
| 2013   |   |   | 8,100,000 |   |
| 2014   |   |   | -0-       |   |
| 2015   |   |   | -0-       |   |
|   |   |   |      |   |
| Total  |   | $      | 9,665,000 |   |

|   | · | Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly such as quoted prices for similar assets or liabilities or market-corroborated inputs; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions about how market participants would price the assets or liabilities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost) |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------|

----

| A summary of the fair value of liabilities measured at fair value on a recurring basis follows:                                                                                                                        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                        |   | Fair Value |   |   | Quoted prices in active markets for identical assets/ liabilities |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |
|                                                                                                                                                                                                                        |   | at March 31, 2011 |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives: (1) (2)                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion feature liability                                                                                                                                                                                                |   | $ | 1,198,000 |   |   | $ | -0- |   |   | $ | -0- |   |   | $ | 1,198,000 |   |
| Warrant liability                                                                                                                                                                                                           |   |   | 3,244,784 |   |   |   | -0- |   |   |   | -0- |   |   |   | 3,244,784 |   |
| Total of derivative liabilties                                                                                                                                                                                              |   | $ | 4,442,784 |   |   | $ | -0- |   |   | $ | -0- |   |   | $ | 4,442,784 |   |
|                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) The fair value of the Derivative Instruments was estimated using the Income Approach and using the American Binomial option pricing model with the following assumptions for the three months ended March 31, 2011 |   |
| (2) The fair value at the measurement date is equal to their carrying value on the balance sheet                                                                                                                       |   |
|                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant Valuation Assumptions of Derivative Instruments at March 31, 2011                                                                                                                                               |   |
| Risk free interest rate                                                                                                                                                                                                     |   | 0.29% to 1.28% |   |   |   |   |   |   |   |   |   |
| Dividend yield                                                                                                                                                                                                              |   |   | 0.00 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Expected Volatility                                                                                                                                                                                                         |   |   | 126.1 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Expected life (range in years)                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Conversion feature liability                                                                                                                                                            |   | 0.25 to 2.72 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Warrant liability                                                                                                                                                                 |   | 0.92 to 5.0 |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                                                                                |   | Other Income               |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                                                                                                                                |   | for the three months ended |       |
|                                                                                                                                                                                |   | March 31, 2011             |       |   | March 31, 2010 |   |
| The net amount of total gains/(losses) for the period included in earnings attributable to the unrealized gain or loss from changes in derivative liabilities at the reporting date |   | $                          | (2,910,570 | ) |   | $ | 1,075,994 |   |
|                                                                                                                                                                                |   |                       |       |   |   |   |   |   |
| Total unrealized gains/(losses) included in earnings                                                                                                                                |   | $                          | (2,910,570 | ) |   | $ | 1,075,994 |   |

|                           |   | Level 3 Financial Assets and Financial Liabilities at Fair Value |    |
|--------------------------------|--------|------------------------------------------------------------------|---------|
|                           |   |                                                             |    |   |   |   |   | Net unrealized |   |   |   |   |   |   |   |   |   |   |
|                           |   |                                                             |    |   |   |   |   | (gains)/losses |   |   | Net |   |   |   |   |   |   |   |
|                           |   |                                                             |    |   |   |   |   | relating to |   |   | purchases, |   |   |   |   |   |   |   |
|                           |   | Balance,                                                         |    |   |   |   |   | instruments still |   |   | issuances |   |   | Net transfers |   |   | Balance, |   |
|                           |   | Beginning                                                        |    |   | Net realized |   |   | held at the |   |   | and |   |   | in and/or out |   |   | end of |   |
|                           |   | of year                                                          |    |   | gains/(losses) |   |   | reporting date |   |   | settlements |   |   | of level 3 |   |   | period |   |
| Period ended March 31, 2011    |   |                                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives:                   |   |                                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion feature liability   |   | $                                                                | 92,206  |   |   | $ | -0- |   |   | $ | 1,105,794 |   |   | $ | -0- |   |   | $ | -0- |   |   | $ | 1,198,000 |   |
| Warrant liability              |   |                                                             | 261,148 |   |   |   | -0- |   |   |   | 1,804,776 |   |   |   | 1,178,860 |   |   |   | -0- |   |   |   | 3,244,784 |   |
| Total of derivative liabilties |   | $                                                                | 353,354 |   |   | $ | -0- |   |   | $ | 2,910,570 |   |   | $ | 1,178,860 |   |   | $ | -0- |   |   | $ | 4,442,784 |   |

----

| 2011   |   | $      | 356,801   |   |
|--------|--------|--------|-----------|--------|
| 2012   |   |   | 404,619   |   |
| 2013   |   |   | 194,738   |   |
| 2014   |   |   | 189,760   |   |
| 2015   |   |   | 197,350   |   |
|   |   |   |      |   |
| Total  |   | $      | 1,343,268 |   |

| 2011   |   | $      | 887,499   |   |
|--------|--------|--------|-----------|--------|
| 2012   |   |   | 450,000   |   |
| 2013   |   |   | 450,000   |   |
| 2014   |   |   | 450,000   |   |
| 2015   |   |   | 450,000   |   |
|   |   |   |      |   |
| Total  |   | $      | 2,687,499 |   |

----

----

| i.   | Promissory Note issued on April 13, 2010 with a principal amount of $450,000 with a maturity date of December 31, 2010. |
|----------------|-------------------------------------------------------------------------------------------------------------------------|

| ii.   | Promissory Note issued on June 29, 2010 with a principal amount of $115,000 with a maturity date of December 31, 2010. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| iii.   | Promissory Note issued on September 30, 2010 with a principal amount of $695,000 with a maturity date of December 31, 2010. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------|

| iv.   | Promissory Note issued on December 31, 2010 with a principal amount of $1,197,500 with a maturity date of December 31, 2010. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------|

| v.   | Promissory Note issued on December 31, 2010 with a principal amount of $409,379 with a maturity date of April 01, 2012. |
|----------------|-------------------------------------------------------------------------------------------------------------------------|

----

|                             |   | Number of Shares |       |   | Weighted Average Exercise Price (per share) |   |   | Weighted Average Remaining Contractual Term (in Years) |   |   | Aggregate Intrinsic Value in (000's) |   |
|----------------------------------|--------|------------------|------------|--------|--------------------------------------------------|--------|--------|--------------------------------------------------------|--------|--------|--------------------------------------|--------|
|                             |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |
| Outstanding at December 31, 2009 |   |             | 12,061,500 |   |                                             |   | 0.40   |                                                   |   |   | 3.62                                 |   |   | $ | -0- |   |
| Granted                          |   |             | 1,865,000  |   |                                             |   | 0.23   |                                                   |   |   |                                 |   |   |   |   |   |
| Exercised                        |   |             | -0-        |   |                                             |   | -0-    |                                                   |   |   |                                 |   |   |   |   |   |
| Forfeited/Cancelled/Expired      |   |             | (2,104,500 | )      |                                             |   | (0.32  | )                                                      |   |   |                                 |   |   |   |   |   |
|                             |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |   |   |   |   |
| Outstanding at December 31, 2010 |   |             | 11,822,000 |   |                                             |   | 0.39   |                                                   |   |   | 3.21                                 |   |   | $ | -0- |   |
|                             |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |   |   |   |   |
| Granted                          |   |             | -0-        |   |                                             |   | -0-    |                                                   |   |   |                                 |   |   |   |   |   |
| Exercised                        |   |             | -0-        |   |                                             |   | -0-    |                                                   |   |   |                                 |   |   |   |   |   |
| Forfeited/Cancelled/Expired      |   |             | (265,000   | )      |                                             |   | 0.26   |                                                   |   |   |                                 |   |   |   |   |   |
|                             |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |   |   |   |   |
| Outstanding at March 31, 2011    |   |             | 11,557,000 |   |                                             | $      | 0.39   |                                                   |   |   | 3.03                                 |   |   | $ | -0- |   |
|                             |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |   |   |   |   |
| Vested and Exercisable at        |   |             |       |   |                                             |   |   |                                                   |   |   |                                 |   |   |   |   |   |
| March 31, 2011                   |   |             | 10,609,500 |   |                                             | $      | 0.41   |                                                   |   |   | 3.03                                 |   |   | $ | -0- |   |

|                                                                      |   | Number of Options Vested |    |   | Fair Value of Options Vested |   |
|---------------------------------------------------------------------------|--------|--------------------------|---------|--------|------------------------------|--------|
| Fair value of options vested during the three months ended March 31, 2011 |   |                     | 662,500 |   |                         | $      | 240,918 |   |
| Fair value of options vested during the three months ended March 31, 2010 |   |                     | 660,000 |   |                         | $      | 245,025 |   |

----

| Awards Breakdown by Range at March 31, 2011 |   |
|---------------------------------------------|--------|
|                                        |   | Outstanding |   |   | Vested |   |
| Strike Price Range                          |   | Outstanding |   |   | Weighted Average Remaining Contractual Life |   |   | Weighted Average Outstanding Strike Price |   |   | Vested |   |   | Weighted Average Remaining Vested Contractual Life |   |   | Weighted Average Vested Strike Price |   |
| 0 to 0.20                                   |   |   | 1,900,000 |   |   |   | 3.81 |   |   | $ | 0.19 |   |   |   | 1,435,000 |   |   |   | 3.74 |   |   | $ | 0.20 |   |
| 0.21 to 0.29                                |   |   | 4,335,000 |   |   |   | 3.10 |   |   | $ | 0.26 |   |   |   | 3,852,500 |   |   |   | 2.97 |   |   | $ | 0.26 |   |
| 0.30 to 0.49                                |   |   | 920,000 |   |   |   | 2.66 |   |   | $ | 0.45 |   |   |   | 920,000 |   |   |   | 2.66 |   |   | $ | 0.45 |   |
| 0.50 to 0.70                                |   |   | 4,402,000 |   |   |   | 2.71 |   |   | $ | 0.60 |   |   |   | 4,402,000 |   |   |   | 2.71 |   |   | $ | 0.60 |   |
| 0 to 0.70                                   |   |   | 11,557,000 |   |   |   | 3.03 |   |   | $ | 0.39 |   |   |   | 10,609,500 |   |   |   | 2.94 |   |   | $ | 0.41 |   |

----

| Awards Breakdown by Range at March 31, 2011 |   |
|---------------------------------------------|--------|
|                                        |   | Outstanding |   |   | Vested |   |
| Strike Price Range                          |   | Outstanding |   |   | Weighted Average Remaining Contractual Life |   |   | Weighted Average Outstanding Strike Price |   |   | Vested |   |   | Weighted Average Remaining Vested Contractual Life |   |   | Weighted Average Vested Strike Price |   |
| 0 to 0.20                                   |   |   | 1,680,000 |   |   |   | 4.7216 |   |   | $ | 0.20 |   |   |   | 1,330,000 |   |   |   | 4.7562 |   |   | $ | 0.20 |   |
| 0.21 to 0.29                                |   |   | 4,495,000 |   |   |   | 2.6052 |   |   | $ | 0.26 |   |   |   | 3,936,666 |   |   |   | 2.3867 |   |   | $ | 0.26 |   |
| 0.30 to 0.49                                |   |   | 1,250,000 |   |   |   | 3.933 |   |   | $ | 0.45 |   |   |   | 1,210,000 |   |   |   | 3.9485 |   |   | $ | 0.45 |   |
| 0.50 to 0.70                                |   |   | 4,686,500 |   |   |   | 3.7053 |   |   | $ | 0.60 |   |   |   | 3,975,250 |   |   |   | 3.8338 |   |   | $ | 0.60 |   |
| 0 to 0.70                                   |   |   | 12,111,500 |   |   |   | 3.4615 |   |   | $ | 0.40 |   |   |   | 10,451,916 |   |   |   | 3.4194 |   |   | $ | 0.40 |   |

|                                |   | Stock Option Assumptions for the three months ended |   |
|-------------------------------------|--------|-----------------------------------------------------|--------|
|                                |   |                                                |   |   |   |   |
|                                |   | March 31, 2011                                      |   |   | March 31, 2010 |   |
| Stock Option Assumptions            |   |                                                |   |   |   |   |
| Risk-free interest rate             |   |                                                | 2.24   | % |   |   | 2.43 | % |
| Expected dividend yield             |   |                                                | 0.0    | % |   |   | 0.00 | % |
| Expected volatility                 |   |                                                | 126.1  | % |   |   | 72.50 | % |
| Expected life of options (in years) |   |                                                | 5.0    |   |   |   | 5.0 |   |

----

|                                                                  |   | Weighted Average Grant-Date Fair Value |   |
|-----------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                  |   | 2011                                   |   |   | 2010 |   |
| Stock options granted during the three month period ended March 31,   |   |                                   | n/a    |   |   | $ | 0.16 |   |
|                                                                  |   |                                   |   |   |   |   |   |   |
| Stock options vested during the three month period ended March 31,    |   | $                                      | 0.36   |   |   | $ | 0.37 |   |
|                                                                  |   |                                   |   |   |   |   |   |   |
| Stock options forfeited during the three month period ended March 31, |   | $                                      | 0.16   |   |   |   | n/a |   |

|                                |   | Shares Underlying Stock Options |      |   | Weighted Average Grant Date Fair Value |   |
|-------------------------------------|--------|---------------------------------|-----------|--------|----------------------------------------|--------|
| Nonvested Shares at January 1, 2011 |   |                            | 1,610,000 |   |                                   | $      | 0.36 |   |
|                                |   |                            |      |   |                                   |   |   |   |
| Nonvested Shares at March 31, 2011  |   |                            | 947,500   |   |                                   | $      | 0.39 |   |

| March 31, 2011 Warrants Outstanding |                    |              | March 31, 2011 Warrants Exercisable |                  |
|------------------------------------------|-------------------------|-------------------|-------------------------------------|-----------------------|
|                                     | Range of Exercise Price |              |                                | Number Outstanding at |   |   | Weighted Average Remaining Contractual Life |   | Weighted Average Exercise Price |   | Number Exercisable at |   | Weighted Average Exercise Price |   |
|                                     |                    |              |                                | March 31, 2011        |   |   |   |   |   |   |   |   | March 31, 2011 |   |   |   |   |
|                                     | $                       | 0.25 – 0.60 |                                |                  |   | 52,195,758 |   |   |   | 3.44 |   |   | $ | 0.40 |   |   |   | 52,195,758 |   |   | $ | 0.40 |   |
|                                     |                    |              |                                |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010 Warrants Outstanding |                    |              | March 31, 2010 Warrants Exercisable |                  |
|                                     | Range of Exercise Price |              |                                | Number Outstanding at |   |   | Weighted Average Remaining Contractual Life |   | Weighted Average Exercise Price |   | Number Exercisable at |   | Weighted Average Exercise Price |   |
|                                     |                    |              |                                |                  | March 31, 2010 |   |   |   |   |   |   |   |   |   |   | March 31, 2010 |   |   |   |   |   |
|                                     | $                       | 0.25 – 0.60 |                                |                  |   | 40,808,241 |   |   |   | 2.21 |   |   | $ | 0.44 |   |   |   | 40,808,241 |   |   | $ | 0.44 |   |

| Warrants                                                    |   |   |       |
|-------------------------------------------------------------|--------|--------|------------|
| Balance at December 31, 2010                                |   |   | 40,808,241 |   |
| Issued                                                      |   |   | 11,467,517 |   |
| Exercised                                                   |   |   | -0-        |   |
| Forfeited                                                   |   |   | (80,000    | ) |
| Balance at March 31, 2011                                   |   |   | 52,195,758 |   |
| Warrants Exercisable at March 31, 2011                      |   |   | 52,195,758 |   |
| Weighted Average Fair Value of Warrants Granted During 2011 |   | $      | 0.25       |   |

----

|                      |   | Foreign Currency Translation |    |   | Accumulated Other Comprehensive Gain (Loss) |   |
|---------------------------|--------|------------------------------|---------|--------|---------------------------------------------|--------|
| Balance December 31, 2009 |   | $                            | 2,934   |   |                                        | $      | 2,934 |   |
| 2010 Activity             |   |                         | (27,232 | )      |                                        |   | (27,232 | ) |
| Balance December 31, 2010 |   |                         | (24,298 | )      |                                        |   | (24,298 | ) |
| 2011 Activity             |   |                         | (9,575  | )      |                                        |   | (9,575 | ) |
| Balance at March 31, 2011 |   | $                            | (33,873 | )      |                                        | $      | (33,873 | ) |

----

| ·   | Stimulating demand by providing clinical trial sponsors with high value eClinical applications and services; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | Emphasizing low operating costs; |
|--------------------|----------------------------------|

| ·   | Continued emphasis on expanding our business model by offering our software solutions on a licensed basis in addition to our existing hosted-services solutions; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Broadening our eClinical suite of services and software applications on an organic R & D basis and on a selective basis via the acquisition or licensing of complementary solutions; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An emphasis on penetrating the Phase I trial market with our dedicated Phase I solution, TrialOne; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | Expanding our business development efforts in Europe to capitalize on our operational and clinical capabilities vis-à-vis our competition in that geographic market; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Providing our services to small and midsize pharmaceutical, biotechnology, medical device companies and CROs; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Expanding our penetration of the large pharmaceutical sponsor market by leveraging the client contracts we assumed from our 2009 acquisitions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                         |   | Summarized Statement of OperationsFor the three months ended |       |   |     |   |   |   |   |
|----------------------------------------------|--------|--------------------------------------------------------------|------------|--------|----------|--------|--------|--------|--------|
|                                         |   | March 31,                                                    |       |   |     |   |   |   |   |
|                                         |   |                                                         |       |   | % of     |   |   |   |   |   | % of |   |   |  $ |   |   | % |   |
|                                         |   | 2011                                                         |       |   | Revenues |   |   | 2010   |   |   | Revenues |   |   | Change |   |   | Change |   |
| Total revenues                               |   | $                                                            | 3,314,668  |   |     |   |   |   | $      | 2,697,363 |   |   |   |   |   | $ | 617,305 |   |   |   | 22.9 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales                                |   |                                                         | 446,055    |   |     |   | 13.5   | %      |   |   | 434,871 |   |   |   | 16.1 | % |   |   | 11,184 |   |   |   | 2.6 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                 |   |                                                         | 2,868,613  |   |     |   | 86.5   | %      |   |   | 2,262,492 |   |   |   | 83.9 | % |   |   | 606,121 |   |   |   | 26.8 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries, benefits and related taxes         |   |                                                         | 2,098,741  |   |     |   | 63.3   | %      |   |   | 2,685,750 |   |   |   | 99.6 | % |   |   | (587,009 | ) |   |   | -21.9 | % |
| Rent                                         |   |                                                         | 225,037    |   |     |   | 6.8    | %      |   |   | 200,734 |   |   |   | 7.4 | % |   |   | 24,303 |   |   |   | 12.1 | % |
| Consulting                                   |   |                                                         | 50,178     |   |     |   | 1.5    | %      |   |   | 210,724 |   |   |   | 7.8 | % |   |   | (160,546 | ) |   |   | -76.2 | % |
| Legal and professional fees                  |   |                                                         | 136,130    |   |     |   | 4.1    | %      |   |   | 85,516 |   |   |   | 3.2 | % |   |   | 50,614 |   |   |   | 59.2 | % |
| Other expenses                               |   |                                                         | 430,040    |   |     |   | 13.0   | %      |   |   | 464,398 |   |   |   | 17.2 | % |   |   | (34,358 | ) |   |   | -7.4 | % |
| Selling, general and administrative          |   |                                                         | 285,967    |   |     |   | 8.6    | %      |   |   | 241,017 |   |   |   | 8.9 | % |   |   | 44,950 |   |   |   | 18.7 | % |
| Total operating expenses                     |   |                                                         | 3,226,093  |   |     |   | 97.3   | %      |   |   | 3,888,139 |   |   |   | 144.1 | % |   |   | (662,046 | ) |   |   | -17.0 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                               |   |                                                         | (357,480   | )      |     |   | -10.8  | %      |   |   | (1,625,647 | ) |   |   | -60.3 | % |   |   | 1,268,167 |   |   |   | -78.0 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                             |   |                                                         | (630,603   | )      |     |   | -19.0  | %      |   |   | (970,508 | ) |   |   | -36.0 | % |   |   | 339,904 |   |   |   | -35.0 | % |
| Interest income                              |   |                                                         | 388        |   |     |   | 0.0    | %      |   |   | 47 |   |   |   | 0.0 | % |   |   | 341 |   |   |   | 725.5 | % |
| Gain (Loss) on extinguishment of debt        |   |                                                         | -0-        |   |     |   | 0.0    | %      |   |   | - |   |   |   | 0.0 | % |   |   | - |   |   |   | 0.0 | % |
| Other Comprehensive Income (Loss)            |   |                                                         | 4,342      |   |     |   | 0.1    | %      |   |   | -0- |   |   |   | 0.0 | % |   |   | 4,342 |   |   |   | 0.0 | % |
| Change in derivatives                        |   |                                                         | (2,910,570 | )      |     |   | -87.8  | %      |   |   | 1,075,994 |   |   |   | 39.9 | % |   |   | (3,986,564 | ) |   |   | -370.5 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                     |   |                                                         | (3,893,923 | )      |     |   | -117.5 | %      |   |   | (1,520,114 | ) |   |   | -56.4 | % |   |   | (2,373,809 | ) |   |   | 156.2 | % |
| Total preferred stock dividends              |   |                                                         | (50,720    | )      |     |   | -1.5   | %      |   |   | (50,720 | ) |   |   | -1.9 | % |   |   | - |   |   |   | 0.0 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributable to common stockholders |   | $                                                            | (3,944,643 | )      |     |   | -119.0 | %      |   | $ | (1,570,834 | ) |   |   | -58.2 | % |   | $ | (2,373,809 | ) |   |   | 151.1 | % |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share                           |   | $                                                            | (0.05      | )      |     |   |   |   |   | $ | (0.02 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of                   |   |                                                         |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| shares outstanding                           |   |                                                         | 86,081,495 |   |     |   |   |   |   |   | 85,507,699 |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                        |   | For the three months ended |      |
|-----------------------------|--------|----------------------------|-----------|
| Business Activity           |   | March 31, 2011             |      |   | March 31, 2010 |   |   | Increase $ |   |   | Increase % |   |
| Set-up Fees                 |   | $                          | 755,555   |   |   |   | 22.8 | % |   | $ | 897,493 |   |   |   | 33.3 | % |   | $ | (141,938 | ) |   |   | -15.8 | % |
| Change Orders               |   |                       | 77,881    |   |   |   | 2.3 | % |   |   | 27,960 |   |   |   | 1.0 | % |   |   | 49,921 |   |   |   | 178.5 | % |
| Maintenance                 |   |                       | 1,433,479 |   |   |   | 43.2 | % |   |   | 1,062,834 |   |   |   | 39.4 | % |   |   | 370,645 |   |   |   | 34.9 | % |
| Software Licenses           |   |                       | 819,054   |   |   |   | 24.7 | % |   |   | 336,315 |   |   |   | 12.5 | % |   |   | 482,739 |   |   |   | 143.5 | % |
| Professional Services       |   |                       | 97,007    |   |   |   | 2.9 | % |   |   | 225,317 |   |   |   | 8.4 | % |   |   | (128,310 | ) |   |   | -56.9 | % |
| Hosting & Subscriptions |   |                       | 131,692   |   |   |   | 4.0 | % |   |   | 147,444 |   |   |   | 5.5 | % |   |   | (15,751 | ) |   |   | -10.7 | % |
| Totals                      |   | $                          | 3,314,668 |   |   |   | 100.0 | % |   | $ | 2,697,363 |   |   |   | 100.0 | % |   | $ | 617,305 |   |   |   | 22.9 | % |

----

----

|                                |   | For the Three Months Ended |      |
|-------------------------------------|--------|----------------------------|-----------|
|                                |   | March 31, 2011             |      |   | March 31, 2010 |   |   | Change |   |   | % Change |   |
| OmniComm Corporate Operations       |   | $                          | 1,338,578 |   |   | $ | 1,731,379 |   |   | $ | (392,801 | ) |   |   | -22.7 | % |
| New Jersey Operations Office        |   |                       | 279,742   |   |   |   | 362,941 |   |   |   | (83,199 | ) |   |   | -22.9 | % |
| OmniComm Europe, GmbH               |   |                       | 256,412   |   |   |   | 336,501 |   |   |   | (80,089 | ) |   |   | -23.8 | % |
| OmniComm Ltd.                       |   |                       | 163,673   |   |   |   | 125,142 |   |   |   | 38,531 |   |   |   | 30.8 | % |
| Employee Stock Option Expense       |   |                       | 60,336    |   |   |   | 129,787 |   |   |   | (69,451 | ) |   |   | -53.5 | % |
|                                |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Salaries and related expenses |   | $                          | 2,098,740 |   |   | $ | 2,685,750 |   |   | $ | (587,010 | ) |   |   | -21.9 | % |

----

| For the three months ended                   |   |
|----------------------------------------------|--------|
|                                         |   | March 31, 2011 |   |   | March 31, 2010 |   |   | Change |   |   | % Change |   |
| Corporate Office                             |   | $ | 80,911 |   |   | $ | 53,434 |   |   | $ | 27,477 |   |   |   | 51.4 | % |
| Co location and disaster recovery facilities |   |   | 89,403 |   |   |   | 96,148 |   |   | $ | (6,745 | ) |   |   | -7.0 | % |
| New Jersey Operations Office                 |   |   | 19,159 |   |   |   | 15,551 |   |   | $ | 3,608 |   |   |   | 23.2 | % |
| OmniComm Europe, GmbH                        |   |   | 21,995 |   |   |   | 22,419 |   |   | $ | (424 | ) |   |   | -1.9 | % |
| OmniComm Ltd.                                |   |   | 22,177 |   |   |   | 13,182 |   |   | $ | 8,995 |   |   |   | 68.24 | % |
| Straight-line rent expense                   |   | $ | (8,609 | ) |   | $ | 0 |   |   | $ | (8,609 | ) |   |   | n/m |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                        |   | $ | 225,037 |   |   | $ | 200,734 |   |   | $ | 24,303 |   |   |   | 12.1 | % |

| For the three months ended |   |
|----------------------------|--------|
| Expense Category           |   | March 31, 2011 |   |   | March 31, 2010 |   |   | Change |   |   | % Change |   |
| Employee Recruitment       |   | $ | -0- |   |   |   | 30,000 |   |   |   | (30,000 | ) |   |   | -100.0 | % |
| Sales & Marketing      |   |   | 900 |   |   |   | 70,425 |   |   |   | (69,525 | ) |   |   | -98.7 | % |
| Product Development        |   |   | 49,278 |   |   |   | 110,299 |   |   |   | (61,021 | ) |   |   | -55.3 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | $ | 50,178 |   |   | $ | 210,724 |   |   | $ | (160,546 | ) |   |   | -76.2 | % |

| For the three months ended |   |
|----------------------------|--------|
| Expense Category           |   | March 31, 2011 |   |   | March 31, 2010 |   |   | Change |   |   | % Change |   |
| Financial Advisory         |   | $ | -0- |   |   | $ | 37,957 |   |   | $ | (37,957 | ) |   |   | -100.0 | % |
| Audit and Related          |   |   | 42,004 |   |   |   | 7,832 |   |   |   | 34,172 |   |   |   | 436.3 | % |
| Accounting Services        |   |   | 49,221 |   |   |   | 20,363 |   |   |   | 28,858 |   |   |   | 141.7 | % |
| Miscellaneous              |   |   | 8,111 |   |   |   | 3,183 |   |   |   | 4,928 |   |   |   | 154.8 | % |
| General Legal              |   |   | 36,794 |   |   |   | 16,180 |   |   |   | 20,614 |   |   |   | 127.4 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | $ | 136,130 |   |   | $ | 85,515 |   |   | $ | 50,615 |   |   |   | 59.2 | % |

----

| Interest Expense                         |   |
|------------------------------------------|--------|
| For the three months ended               |   |
| Debt Description                         |   | March 31, 2011 |   |   | March 31, 2010 |   |   | Change $ |   |
| Accretion of Discount from Derivatives   |   | $ | 243,685 |   |   | $ | 671,477 |   |   | $ | (427,792 | ) |
| August 2008 Convertible Notes            |   |   | 47,342 |   |   |   | 55,973 |   |   |   | (8,631 | ) |
| December 2008 Convertible Notes          |   |   | 147,353 |   |   |   | 150,164 |   |   |   | (2,811 | ) |
| Sept 2009 Secured Convertible Debentures |   |   | 41,359 |   |   |   | 41,425 |   |   |   | (66 | ) |
| Dec 2009 Convertible Debentures          |   |   | 44,088 |   |   |   | 44,088 |   |   |   | - |   |
| General Interest                         |   |   | 17,638 |   |   |   | 4,330 |   |   |   | 13,308 |   |
| Related Party Notes from fiscal 2010     |   |   | 89,138 |   |   |   | 3,051 |   |   |   | 86,087 |   |
| Total                                    |   | $ | 630,603 |   |   | $ | 970,508 |   |   | $ | (339,905 | ) |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Related Party Interest Expense           |   |   | 358,990 |   |   |   | 273,243 |   |   |   |   |   |
| Interest Income                          |   |   | 388 |   |   |   | 47 |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest Expense                   |   |   | 630,603 |   |   |   | 970,508 |   |   |   | -339,905 |   |
| Non Related Party Interest Expense       |   | $ | 271,613 |   |   | $ | 697,265 |   |   |   |   |   |

----

| Series of Preferred Stock        |   | Cumulative Arrearage |      |
|----------------------------------|--------|----------------------|-----------|
|                             |   |                 |      |
| Series A                         |   | $                    | 1,790,894 |   |
| Series B                         |   |                 | 609,904   |   |
| Series C                         |   |                 | 1,469,593 |   |
| Total Preferred Stock Arrearages |   | $                    | 3,870,391 |   |

| Liquidity and Capital Resources                                              |   |
|------------------------------------------------------------------------------|--------|
| (all amounts in USD $)                                                       |   |   |   |   |   |   |   |   |   |
| Summarized Balance Sheet Disclosure                                          |   |
|                                                                         |   | March 31, 2011 |   |   | December 31, 2010 |   |   | Change |   |
| Cash                                                                         |   | $ | 138,609 |   |   | $ | 1,213,397 |   |   | $ | (1,074,788 | ) |
| Accounts Receivable, net of allowance for doubtful accounts                  |   |   | 1,165,884 |   |   |   | 1,031,745 |   |   |   | 134,139 |   |
| Current Assets                                                               |   |   | 1,446,660 |   |   |   | 2,342,479 |   |   |   | (895,818 | ) |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts Payable and accrued expenses                                        |   |   | 1,283,112 |   |   |   | 1,371,703 |   |   |   | (88,592 | ) |
| Deferred revenue, current portion                                            |   |   | 4,105,658 |   |   |   | 4,060,425 |   |   |   | 45,232 |   |
| Convertible notes payable,  current portion, net of discount       |   |   | 219,766 |   |   |   | 395,733 |   |   |   | (175,967 | ) |
| Convertible notes payable, related parties, current portion, net of discount |   |   | 2,389,274 |   |   |   | -0- |   |   |   | 2,389,274 |   |
| Conversion feature liability, related parties, current portion               |   |   | 1,170,200 |   |   |   | -0- |   |   |   | 1,170,200 |   |
| Conversion feature liability, current portion                                |   |   | 27,800 |   |   |   | 72 |   |   |   | 27,728 |   |
| Warrant liability, related parties                                           |   |   | 2,801,607 |   |   |   | -0- |   |   |   | 2,801,607 |   |
| Warrant liability                                                            |   |   | 443,177 |   |   |   | -0- |   |   |   | 443,177 |   |
| Current liabilities                                                          |   |   | 13,348,093 |   |   |   | 11,482,277 |   |   |   | 1,865,815 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Working Capital (Deficit)                                                    |   | $ | (11,901,432 | ) |   | $ | (3,916,994 | ) |   | $ | (7,984,438 | ) |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|  Statement of Cash Flows Disclosure                                     |   |   |   |   |   |
|  For the three months ended                                             |   |   |   |   |   |
|                                                                         |   | March 31, 2011 |   |   | March 31, 2010 |   |   |   |   |   |
| Net cash provided by (used in) operating activities                          |   | $ | (808,534 | ) |   | $ | 251,311 |   |   |   |   |   |
| Net cash used in investing activities                                        |   |   | (44,179 | ) |   |   | (164,055 | ) |   |   |   |   |
| Net cash used in financing activities                                        |   |   | (212,500 | ) |   |   | - |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                         |   | $ | (1,074,788 | ) |   | $ | 78,213 |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in working capital accounts                                          |   | $ | (371,818 | ) |   | $ | 1,804,168 |   |   |   |   |   |
| Effect of non-cash transactions on cash and cash equivalents                 |   | $ | 3,457,206 |   |   | $ | (32,743 | ) |   |   |   |   |

----

| Contractual Obligations         |   |   | Payments Due by Period |   |
|---------------------------------|--------|--------|------------------------|--------|
|                            |   | Total  |                   |   | Less than 1 year |   |   | 1-2 Years |   |   | 2-3 Years |   |   | 3-5 Years |   |
| Promissory Notes (1)            |   | $      | 3,625,666              |   |   | $ | 20,000 |  (2) |   | $ | 169,300 |  (3) |   | $ | 569,487 |  (4) |   | $ | 2,866,879 |  (5) |
| Convertible Notes               |   |   | 9,665,000              |   |   |   | 1,565,000 |  (6) |   |   | -0- |   |   |   | 8,100,000 |  (7) |   |   | -0- |   |
| Operating Lease Obligations (8) |   |   | 1,343,268              |   |   |   | 356,801 |   |   |   | 404,619 |   |   |   | 194,738 |   |   |   | 387,110 |   |
| Patent Licensing Fees (9)       |   |   | 2,687,499              |   |   |   | 887,499 |   |   |   | 450,000 |   |   |   | 450,000 |   |   |   | 900,000 |   |
| Total                           |   | $      | 17,321,433             |   |   | $ | 2,829,300 |   |   | $ | 1,023,919 |   |   | $ | 9,314,225 |   |   | $ | 4,153,989 |   |

| (1) | Amounts do not include interest to be paid. |
|-----|---------------------------------------------|

| (2) | Includes $20,000 of 12% notes payable that mature in December 2011. |
|-----|---------------------------------------------------------------------|

| (3) | Includes $111,800 of 12% notes payable that mature in July 2012; $37,500 of 12% notes payable that mature in April 2012; and $20,000 of 12% notes payable that mature on December 2012. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes $137,500 of 12% notes payable that mature in April 2013; and $431,987 of 10% notes payable that mature in January 2013. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes a $2,866,879 12% note payable that matures in April 2014. |
|-----|--------------------------------------------------------------------|

| (6) | Includes $75,000 of 10% convertible notes currently in default and due that are convertible into shares of common stock at the option of the holder at a conversion rate of $1.25 per share; and $1,490,000 in convertible notes that mature in June 2011. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (7) | Includes $1,920,000 in 10% convertible notes that mature in August 2013 and $4,980,000 in 12% convertible notes that mature in December 2013 and $1,200,000 in 12% convertible notes that mature in March 2013. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Includes office lease obligations for our headquarters in Fort Lauderdale, for our regional operating office in New Jersey, our R & D office in England, our European headquarters in Bonn, Germany and our co-location and disaster recovery computer service centers in Cincinnati, Ohio and Fort Lauderdale, Florida. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Relates to guaranteed minimum payments owed in connection with our settlement of a patent infringement lawsuit brought against the Company by DataSci, LLC. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vi.   | Promissory Note issued on April 13, 2010 with a principal amount of $450,000 with a maturity date of December 31, 2010. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------|

| vii.   | Promissory Note issued on June 29, 2010 with a principal amount of $115,000 with a maturity date of December 31, 2010. |
|------------------|------------------------------------------------------------------------------------------------------------------------|

| viii.   | Promissory Note issued on September 30, 2010 with a principal amount of $695,000 with a maturity date of December 31, 2010. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ix.   | Promissory Note issued on December 31, 2010 with a principal amount of $1,197,500 with a maturity date of December 31, 2010. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------|

| x.   | Promissory Note issued on December 31, 2010 with a principal amount of $409,379 with a maturity date of April 01, 2012. |
|----------------|-------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| ITEM 3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
|---------------|-------------------------------------------------------------|

| ITEM 4.  | CONTROLS AND PROCEDURES |
|---------------|-------------------------|

----

----

| EXHIBIT NO. | DESCRIPTION                                                                                                                                                                                   |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, promulgated under the Securities and Exchange Act of 1934, as amended.                |
| 31.2        | Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, promulgated under the Securities and Exchange Act of 1934, as amended. |
| 32.1        | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                        |
| 10.44       | Promissory note dated March 31, 2011 to Cornelis F. wit                                                                                                                                       |

----