----

| Nevada(State or other jurisdiction of incorporation or organization)                      | 85-0206668(IRS Employer Identification No.) |
|-------------------------------------------------------------------------------------------|---------------------------------------------|
|                                                                                      |                                        |
| 2490 East Sunset Road, Suite 100Las Vegas, Nevada(Address of principal executive offices) | 89120(Zip Code)                             |

| Large accelerated filer  ̈                                             | Accelerated filer  ̈         |
|----------------------------------------------------------------------------|----------------------------------|
|                                                                       |                             |
| Non-accelerated filer  ̈ (do not check if a smaller reporting company) | Smaller reporting company þ |

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|                                                                                                                        | Page   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|
| PART I                                                                                                                      |
| FINANCIAL INFORMATION                                                                                                       |
|                                                                                                                        |   |
| Item 1. Financial Statements                                                                                                | 3      |
|                                                                                                                        |   |
| Condensed Consolidated Balance Sheets as of March 31, 2011 (unaudited) and September 30, 2010                               | 3      |
| Unaudited Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended March 31, 2011 and 2010 | 4      |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2011 and 2010                  | 5      |
| Notes to Unaudited Condensed Consolidated Financial Statements                                                              | 6      |
|                                                                                                                        |   |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                         | 16     |
|                                                                                                                        |   |
| Item 4. Controls and Procedures                                                                                             | 23     |
|                                                                                                                        |   |
| PART II                                                                                                                     |
| OTHER INFORMATION                                                                                                           |
|                                                                                                                        |   |
| Item 1. Legal Proceedings                                                                                                   | 24     |
|                                                                                                                        |   |
| Item 1A. Risk Factors                                                                                                       | 24     |
|                                                                                                                        |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                         | 25     |
|                                                                                                                        |   |
| Item 5. Other Information                                                                                                   | 25     |
|                                                                                                                        |   |
| Item 6. Exhibits                                                                                                            | 25     |
|                                                                                                                        |   |
| Signatures                                                                                                                  | 27     |

----

|                                                                                                                                                                                                      |   | March 31, |        |   | September 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|--------|--------------------|--------|
|                                                                                                                                                                                                      |   | 2011           |        |   | 2010               |   |
|                                                                                                                                                                                                      |   | (unaudited)    |        |   |               |   |
|                                                                                                                                                                                                      |   |           |        |   |               |   |
| Assets                                                                                                                                                                                                    |   |           |        |   |               |   |
| Cash and cash equivalents                                                                                                                                                                                 |   | $              | 641,134     |   |               | $      | 3,227,374 |   |
| Certificates of deposit                                                                                                                                                                                   |   |           | 101,293     |   |               |   | 101,293 |   |
| Accounts receivable, net                                                                                                                                                                                  |   |           | 920,636     |   |               |   | 948,439 |   |
| Prepaid expenses and other current assets                                                                                                                                                                 |   |           | 181,010     |   |               |   | 219,121 |   |
| Total current assets                                                                                                                                                                                      |   |           | 1,844,073   |   |               |   | 4,496,227 |   |
| Accounts receivable, long term portion, net                                                                                                                                                               |   |           | 273,625     |   |               |   | 330,234 |   |
| Property and equipment, net                                                                                                                                                                               |   |           | 262,769     |   |               |   | 397,382 |   |
| Deposits and other assets                                                                                                                                                                                 |   |           | 52,089      |   |               |   | 49,294 |   |
| Intangible assets, net                                                                                                                                                                                    |   |           | 1,284,899   |   |               |   | 1,938,952 |   |
| Total assets                                                                                                                                                                                              |   | $              | 3,717,455   |   |               | $      | 7,212,089 |   |
|                                                                                                                                                                                                      |   |           |        |   |               |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                                                                      |   |           |        |   |               |   |   |   |
| Liabilities:                                                                                                                                                                                              |   |           |        |   |               |   |   |   |
| Accounts payable                                                                                                                                                                                          |   | $              | 758,773     |   |               | $      | 354,440 |   |
| Accrued liabilities                                                                                                                                                                                       |   |           | 766,431     |   |               |   | 880,188 |   |
| Current portion of capital lease obligation                                                                                                                                                               |   |           | 62,738      |   |               |   | 60,327 |   |
| Total current liabilities                                                                                                                                                                                 |   |           | 1,587,942   |   |               |   | 1,294,955 |   |
| Long term portion of capital lease obligation                                                                                                                                                             |   |           | 5,330       |   |               |   | 38,283 |   |
| Total liabilities                                                                                                                                                                                         |   |           | 1,593,272   |   |               |   | 1,333,238 |   |
|                                                                                                                                                                                                      |   |           |        |   |               |   |   |   |
| Commitments and contingencies                                                                                                                                                                             |   |           |        |   |               |   |   |   |
|                                                                                                                                                                                                      |   |           |        |   |               |   |   |   |
| Stockholders' equity:                                                                                                                                                                                     |   |           |        |   |               |   |   |   |
| Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 127,840 issued and outstanding, liquidation preference $38,202                                                         |   |           | 10,866      |   |               |   | 10,866 |   |
| Common stock, $0.001 par value, 10,000,000 shares authorized, 647,110 and 609,643 shares issued, 642,858 and 605,391 shares outstanding at March 31, 2011 and  September 30, 2010, respectively |   |           | 647         |   |               |   | 610 |   |
| Treasury stock (4,252 shares carried at cost)                                                                                                                                                             |   |           | (70,923     | )      |               |   | (70,923 | ) |
| Paid in capital                                                                                                                                                                                           |   |           | 20,733,069  |   |               |   | 20,441,721 |   |
| Accumulated deficit                                                                                                                                                                                       |   |           | (18,549,476 | )      |               |   | (14,503,423 | ) |
| Total stockholders' equity                                                                                                                                                                                |   |           | 2,124,183   |   |               |   | 5,878,851 |   |
|                                                                                                                                                                                                      |   |           |        |   |               |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                                                                |   | $              | 3,717,455   |   |               | $      | 7,212,089 |   |

----

|                                                                |   | Three Months Ended March 31, |       |   | Six Months Ended March 31, |   |
|---------------------------------------------------------------------|--------|--------------------------------------------------|------------|--------|------------------------------------------------|--------|
|                                                                |   | 2011                                             |       |   | 2010                                           |   |   | 2011 |   |   | 2010 |   |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |
| Net revenues                                                        |   | $                                                | 1,118,165  |   |                                           | $      | 1,101,816 |   |   | $ | 2,112,787 |   |   | $ | 2,209,340 |   |
| Cost of services                                                    |   |                                             | 1,512,783  |   |                                           |   | 182,597 |   |   |   | 2,407,360 |   |   |   | 280,946 |   |
| Gross profit                                                        |   |                                             | (394,618   | )      |                                           |   | 919,219 |   |   |   | (294,573 | ) |   |   | 1,928,394 |   |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                 |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                                 |   |                                             | 1,611,382  |   |                                           |   | 3,138,052 |   |   |   | 3,583,951 |   |   |   | 7,099,942 |   |
| Sales and marketing expenses                                        |   |                                             | 23,183     |   |                                           |   | 90,054 |   |   |   | 36,775 |   |   |   | 261,111 |   |
| Total operating expenses                                            |   |                                             | 1,634,565  |   |                                           |   | 3,228,106 |   |   |   | 3,620,726 |   |   |   | 7,361,053 |   |
| Operating loss                                                      |   |                                             | (2,029,183 | )      |                                           |   | (2,308,887 | ) |   |   | (3,915,299 | ) |   |   | (5,432,659 | ) |
| Other income (expense):                                             |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest income (expense), net                                      |   |                                             | (310       | )      |                                           |   | 3,608 |   |   |   | 1,252 |   |   |   | 10,518 |   |
| Other income (expense)                                              |   |                                             | -          |   |                                           |   | (22,693 | ) |   |   | - |   |   |   | 27,307 |   |
| Total other income (expense)                                        |   |                                             | (310       | )      |                                           |   | (19,085 | ) |   |   | 1,252 |   |   |   | 37,825 |   |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income taxes                                            |   |                                             | (2,029,493 | )      |                                           |   | (2,327,972 | ) |   |   | (3,914,047 | ) |   |   | (5,394,834 | ) |
| Income tax provision (benefit)                                      |   |                                             | -          |   |                                           |   | (330,357 | ) |   |   | - |   |   |   | (230,382 | ) |
| Loss from continuing operations                                     |   |                                             | (2,029,493 | )      |                                           |   | (1,997,615 | ) |   |   | (3,914,047 | ) |   |   | (5,164,452 | ) |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations                                             |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from discontinued component, including disposal costs |   |                                             | (285,207   | )      |                                           |   | 224,095 |   |   |   | (131,047 | ) |   |   | 865,279 |   |
| Income tax provision (benefit)                                      |   |                                             | -          |   |                                           |   | - |   |   |   | - |   |   |   | - |   |
| Income (loss) from discontinued operations                          |   |                                             | (285,207   | )      |                                           |   | 224,095 |   |   |   | (131,047 | ) |   |   | 865,279 |   |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                            |   | $                                                | (2,314,700 | )      |                                           | $      | (1,773,520 | ) |   | $ | (4,045,094 | ) |   | $ | (4,299,173 | ) |
|                                                                |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share - basic and diluted1:                            |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Loss from continuing operations                                     |   | $                                                | (3.24      | )      |                                           | $      | (3.33 | ) |   | $ | (6.36 | ) |   | $ | (8.61 | ) |
| Discontinued operations                                             |   |                                             | (0.46      | )      |                                           |   | 0.37 |   |   |   | (0.21 | ) |   |   | 1.44 |   |
| Net loss                                                            |   | $                                                | (3.70      | )      |                                           | $      | (2.96 | ) |   | $ | (6.57 | ) |   | $ | (7.17 | ) |
| Weighted average common shares outstanding:                         |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                               |   |                                             | 625,982    |   |                                           |   | 599,653 |   |   |   | 615,369 |   |   |   | 599,594 |   |
| Diluted                                                             |   |                                             | 625,982    |   |                                           |   | 599,653 |   |   |   | 615,369 |   |   |   | 599,594 |   |

----

|                                                                        |   | Six Months Ended |       |
|-----------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                        |   | March 31,             |       |
|                                                                        |   | 2011                       |       |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                       |   |                       |       |   |   |   |
| Net loss                                                                    |   | $                          | (4,045,094 | ) |   | $ | (4,299,173 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                       |       |   |   |   |   |   |
| Depreciation and amortization                                               |   |                       | 395,728    |   |   |   | 443,853 |   |
| Non-cash stock compensation expense                                         |   |                       | 23,499     |   |   |   | 7,205 |   |
| Amortization of deferred stock compensation                                 |   |                       | 17,885     |   |   |   | 120,131 |   |
| Provision for uncollectible accounts                                        |   |                       | 392,171    |   |   |   | 648,561 |   |
| Non-cash impairment of goodwill and intangibles                             |   |                       | 367,588    |   |   |   | - |   |
| Loss on disposal of property and equipment and intangible assets            |   |                       | 25,350     |   |   |   | 74,271 |   |
| Changes in assets and liabilities:                                          |   |                       |       |   |   |   |   |   |
| Accounts receivable                                                         |   |                       | (307,759   | ) |   |   | 108,760 |   |
| Prepaid expenses and other current assets                                   |   |                       | 38,111     |   |   |   | (167,356 | ) |
| Deposits and other assets                                                   |   |                       | (2,795     | ) |   |   | (6,114 | ) |
| Accounts payable                                                            |   |                       | 404,333    |   |   |   | 185,400 |   |
| Accrued liabilities                                                         |   |                       | (114,715   | ) |   |   | (98,325 | ) |
| Income taxes receivable and payable                                         |   |                       | -          |   |   |   | 1,490,835 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| Net cash used in operating activities                                       |   |                       | (2,805,698 | ) |   |   | (1,491,952 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                       |   |                       |       |   |   |   |   |   |
| Expenditures for intangible assets                                          |   |                       | -          |   |   |   | (268,693 | ) |
| Investment in certificate of deposits                                       |   |                       | -          |   |   |   | (200,000 | ) |
| Purchases of property and equipment                                         |   |                       | -          |   |   |   | (56,321 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| Net cash used in investing activities                                       |   |                       | -          |   |   |   | (525,014 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                       |   |                       |       |   |   |   |   |   |
| Principal repayments on capital lease obligations                           |   |                       | (30,542    | ) |   |   | (58,068 | ) |
| Issuance of common stock for cash                                           |   |                       | 250,000    |   |   |   | - |   |
| Purchase of treasury stock                                                  |   |                       | -          |   |   |   | (25,882 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| Net cash provided by (used in) financing activities                         |   |                       | 219,458    |   |   |   | (83,950 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| DECREASE IN CASH AND CASH EQUIVALENTS                                       |   |                       | (2,586,240 | ) |   |   | (2,100,916 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, beginning of period                              |   |                       | 3,227,374  |   |   |   | 7,568,030 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                    |   | $                          | 641,134    |   |   | $ | 5,467,114 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| Supplemental cash flow disclosures:                                         |   |                       |       |   |   |   |   |   |
| Noncash financing and investing activities:                                 |   |                       |       |   |   |   |   |   |
| Accrued and unpaid dividends                                                |   | $                          | 958        |   |   | $ | 958 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| Interest paid                                                               |   | $                          | 2,270      |   |   | $ | 3,777 |   |

----

----

|                                  |   | March 31, |       |   | September 30, |   |
|---------------------------------------|--------|----------------|------------|--------|--------------------|--------|
|                                  |   | 2011           |       |   | 2010               |   |
|                                  |   | (unaudited)    |       |   |               |   |
|                                  |   |           |       |   |               |   |
| Receivables, current, net:            |   |           |       |   |               |   |
| Accounts receivable, current          |   | $              | 2,468,093  |   |               | $      | 2,750,393 |   |
| Less: Allowance for doubtful accounts |   |           | (1,547,457 | )      |               |   | (1,801,954 | ) |
|                                  |   | $              | 920,636    |   |               | $      | 948,439 |   |
| Receivables, long term, net:          |   |           |       |   |               |   |   |   |
| Accounts receivable, long term        |   | $              | 571,089    |   |               | $      | 680,108 |   |
| Less: Allowance for doubtful accounts |   |           | (297,464   | )      |               |   | (349,874 | ) |
|                                  |   | $              | 273,625    |   |               | $      | 330,234 |   |
| Total receivables, net:               |   |           |       |   |               |   |   |   |
| Gross receivables                     |   | $              | 3,039,182  |   |               | $      | 3,430,501 |   |
| Less: Allowance for doubtful accounts |   |           | (1,844,921 | )      |               |   | (2,151,828 | ) |
|                                  |   | $              | 1,194,261  |   |               | $      | 1,278,673 |   |

|                                 |   | March 31, |     |   | September 30, |   |
|--------------------------------------|--------|----------------|----------|--------|--------------------|--------|
|                            |   | 2011           |     |   | 2010               |   |
|                                 |   | (unaudited)    |     |   |               |   |
| Property and equipment, net:         |   |           |     |   |               |   |
| Leasehold improvements               |   | $              | 234,476  |   |               | $      | 239,271 |   |
| Furnishings and fixtures             |   |           | 239,715  |   |               |   | 319,004 |   |
| Office, computer equipment and other |   |           | 445,373  |   |               |   | 704,388 |   |
|                                 |   |           | 919,564  |   |               |   | 1,262,663 |   |
|  Less: Accumulated depreciation |   |           | (656,795 | )      |               |   | (865,281 | ) |
|                                 |   | $              | 262,769  |   |               | $      | 397,382 |   |

|                                          |   | March 31, |      |   | September 30, |   |
|-----------------------------------------------|--------|----------------|-----------|--------|--------------------|--------|
|                                     |   | 2011           |      |   | 2010               |   |
|                                          |   | (unaudited)    |      |   |               |   |
| Intangible assets, net:                       |   |           |      |   |               |   |
| Domain name and marketing related intangibles |   | $              | 1,509,600 |   |               | $      | 1,509,600 |   |
| Website and technology related intangibles    |   |           | 363,367   |   |               |   | 1,914,991 |   |
|                                          |   |           | 1,872,967 |   |               |   | 3,424,591 |   |
| Less: Accumulated amortization                |   |           | (588,068  | )      |               |   | (1,485,639 | ) |
|                                          |   | $              | 1,284,899 |   |               | $      | 1,938,952 |   |

----

|                                      |   | March 31, |    |   | September 30, |   |
|-------------------------------------------|--------|----------------|---------|--------|--------------------|--------|
|                                      |   | 2011           |    |   | 2010               |   |
|                                      |   | (unaudited)    |    |   |               |   |
| Accrued liabilities:                      |   |           |    |   |               |   |
| Deferred revenue                          |   | $              | 49,349  |   |               | $      | 87,574 |   |
| Accrued payroll and bonuses               |   |           | 77,344  |   |               |   | 124,544 |   |
| Accruals under revenue sharing agreements |   |           | 141,900 |   |               |   | 133,119 |   |
| Accrued expenses - other                  |   |           | 497,838 |   |               |   | 534,951 |   |
|                                      |   | $              | 766,431 |   |               | $      | 880,188 |   |

|   | · | Employee contract termination charges of $7,083 reflecting the reduction in force of 8 employees; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Non cash impairment charges of $367,588 consisting of the write-off of net intangible assets; |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

|                              |   |           |   |   | Weighted |   |   | Weighted              |   |   |      |   |
|-----------------------------------|--------|----------------|--------|--------|----------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                              |   |           |   |   | Average  |   |   | Average               |   |   | Aggregate |   |
|                              |   | Number of |   |   | Exercise |   |   | Remaining             |   |   | Intrinsic |   |
|                              |   | Shares         |   |   | Price    |   |   | Contractual Life |   |   | Value     |   |
| Outstanding at September 30, 2010 |   |           | 5,000  |   |     |   |   |                  |   |   |      |   |   |
| Granted at market price           |   |           | 12,813 |   |     |   |   |                  |   |   |      |   |   |
| Exercised                         |   |           | -      |   |     |   |   |                  |   |   |      |   |   |
| Forfeited                         |   |           | (5,000 | )      |     | $      | 14.50  |                  |   |   |      |   |   |   |
| Outstanding at March 31, 2011     |   |           | 12,813 |   |     | $      | 3.72   |                  |   |   | 10.0      |   |   | $ | - |   |
| Exercisable                       |   |           | -      |   |     | $      | -      |                  |   |   | -         |   |   | $ | - |   |

| Outstanding (unvested) at September 30, 2010 |   |   | 4,658  |   |
|----------------------------------------------|--------|--------|--------|--------|
| Granted                                      |   |   | -      |   |
| Forfeited                                    |   |   | -      |   |
| Vested                                       |   |   | (2,375 | )      |
| Outstanding (unvested) at March 31, 2011     |   |   | 2,283  |   |

----

|   | · | $50,000 was wired to the Company on December 3, 2010 in exchange for the Company’s issuance of 8,000 shares of Common Stock (determined by using the $6.25 per share purchase price applicable to the first Tranche). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $50,000 was wired to the Company’s designated account on December 22, 2010 in exchange for the issuance of 7,014 shares (determined by using the $7.13 per share purchase price applicable to the second Tranche). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $50,000 was wired to the Company’s designated account on January 22, 2011 in exchange for the issuance of 6,704 shares (determined by using the $7.46 per share purchase price applicable to the third Tranche). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $50,000 was wired to the Company’s designated account on February 25, 2011 in exchange for the issuance of 7,239 shares (determined by using the $6.91 per share purchase price applicable to the fourth Tranche). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $50,000 was wired to the Company’s designated account on March 28, 2011 in exchange for the issuance of 8,510 shares (determined by using the $5.87 per share purchase price applicable). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $50,000 was wired to the Company’s designated account on April 26, 2011 in exchange for the issuance of 10,124 shares (determined by using the $4.94 per share purchase price applicable). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An additional $50,000 shall be wired to the Company’s designated account on or before May 25, 2011. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

----

|                                    |   | Three Months Ended March 31, |       |   | Six Months Ended March 31, |   |
|----------------------------------------------|--------|--------------------------------------------------|------------|--------|------------------------------------------------|--------|
|                                         |   | 2011                                             |       |   | 2010                                           |   |   | 2011 |   |   | 2010 |   |
|                                         |   |                                             |       |   |                                           |   |   |   |   |   |   |   |
| Loss from continuing operations              |   | $                                                | (2,029,493 | )      |                                           | $      | (1,997,615 | ) |   | $ | (3,914,047 | ) |   | $ | (5,164,452 | ) |
| Less: preferred stock dividends              |   |                                             | (479       | )      |                                           |   | (479 | ) |   |   | (958 | ) |   |   | (958 | ) |
| Loss from continuing operations              |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| applicable to common stock                   |   |                                             | (2,029,972 | )      |                                           |   | (1,998,094 | ) |   |   | (3,915,005 | ) |   |   | (5,165,410 | ) |
| Income (loss) from discontinued operations   |   |                                             | (285,207   | )      |                                           |   | 224,095 |   |   |   | (131,047 | ) |   |   | 865,279 |   |
| Net loss applicable to common stock          |   | $                                                | (2,315,179 | )      |                                           | $      | (1,773,999 | ) |   | $ | (4,046,052 | ) |   | $ | (4,300,131 | ) |
|                                         |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding - |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| basic and diluted                            |   |                                             | 625,982    |   |                                           |   | 599,653 |   |   |   | 615,369 |   |   |   | 599,594 |   |
|                                         |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share - basic and diluted1:     |   |                                             |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Loss from continuing operations              |   | $                                                | (3.24      | )      |                                           | $      | (3.33 | ) |   | $ | (6.36 | ) |   | $ | (8.61 | ) |
| Discontinued operations                      |   |                                             | (0.46      | )      |                                           |   | 0.37 |   |   |   | (0.21 | ) |   |   | 1.44 |   |
| Net loss                                     |   | $                                                | (3.70      | )      |                                           | $      | (2.96 | ) |   | $ | (6.57 | ) |   | $ | (7.17 | ) |

|                                  |   | Three Months Ended March 31, |    |   | Six Months Ended March 31, |   |
|--------------------------------------------|--------|--------------------------------------------------|---------|--------|------------------------------------------------|--------|
|                                       |   | 2011                                             |    |   | 2010                                           |   |   | 2011 |   |   | 2010 |   |
|                                       |   |                                             |    |   |                                           |   |   |   |   |   |   |   |
| Options to purchase shares of common stock |   |                                             | 12,813  |   |                                           |   | 30,000 |   |   |   | 15,313 |   |   |   | 42,568 |   |
| Series E convertible preferred stock       |   |                                             | 127,840 |   |                                           |   | 127,840 |   |   |   | 127,840 |   |   |   | 127,840 |   |
| Shares of non-vested restricted stock      |   |                                             | 2,283   |   |                                           |   | 6,743 |   |   |   | 2,283 |   |   |   | 8,100 |   |
|                                       |   |                                             | 142,936 |   |                                           |   | 164,583 |   |   |   | 145,436 |   |   |   | 178,508 |   |

----

|                                  |   | Payments Due by Fiscal Year |      |   |   |   |
|--------------------------------------------|--------|-------------------------------------------------|-----------|--------|--------|--------|
|                                       |   | Total                                           |      |   | 2011   |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | Thereafter |   |
| Operating lease commitments                |   | $                                               | 644,268   |   |   | $      | 205,497 |   |   | $ | 348,871 |   |   | $ | 89,900 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Noncanceleable service contracts |   |                                            | 472,458   |   |   |   | 334,458 |   |   |   | 138,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                       |   | $                                               | 1,116,726 |   |   | $      | 539,955 |   |   | $ | 486,871 |   |   | $ | 89,900 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| 2011                                                  |   | $      | 32,071 |   |
|-------------------------------------------------------|--------|--------|--------|--------|
| 2012                                                  |   |   | 37,417 |   |
| 2013                                                  |   |   | -      |   |
| 2014                                                  |   |   | -      |   |
| 2015                                                  |   |   | -      |   |
| Thereafter                                            |   |   | -      |   |
| Total minimum lease payments                          |   |   | 69,488 |   |
| Less imputed interest                                 |   |   | (1,420 | )      |
| Present value of minimum lease payments               |   |   | 68,068 |   |
| Less: current maturities of capital lease obligations |   |   | 62,738 |   |
| Noncurrent maturities of capital lease obligations    |   | $      | 5,330  |   |

----

----

----

|   | · | The Borrowers may not prepay the unpaid principal amount of the Loan, in full or in part, without Lender’s consent, during the first six months of the term. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Lender’s designated representative will have the right to observe meetings of any Borrower’s board of directors solely in a non-voting, non-contributing capacity (provided that such representative may be excluded from sensitive or confidential portions of such meetings). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Borrowers are prohibited from creating, incurring or assuming additional indebtedness except for (among other things) (i) obligations to Lender, (ii) trade debt incurred in the ordinary course of business or (iii) purchase money financing and/or equipment leases for new equipment that do not exceed $25,000 in the aggregate during any single fiscal year. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Borrowers are prohibited from (i) entering into any merger, consolidation, reorganization or recapitalization with another person or entity, or (ii) acquiring all of the assets, or a material portion of the assets or stock, of any other person or entity. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Borrowers are prohibited from making or declaring any dividend or distribution in respect of their capital stock or other equity interests. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | Employee contract termination charges of $7,083 reflecting the reduction in force of 8 employees; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Non cash impairment charges $367,588 consisting of the write-off of net intangible assets; |
|--------|--------|--------------------------------------------------------------------------------------------|

----

|                         |   | Net Revenues |      |
|------------------------------|--------|-------------------|-----------|
|                         |   | 2011              |      |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |              |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                 | 1,118,165 |   |   | $ | 1,101,816 |   |   | $ | 16,349 |   |   |   | 1 | % |
| Six Months Ended March 31,   |   | $                 | 2,112,787 |   |   | $ | 2,209,340 |   |   | $ | (96,553 | ) |   |   | (4 | )% |

----

|                         |   | Cost of Services |      |
|------------------------------|--------|----------------------------|-----------|
|                         |   | 2011                       |      |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                       |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                          | 1,512,783 |   |   | $ | 182,597 |   |   | $ | 1,330,186 |   |   |   | 728 | % |
| Six Months Ended March 31,   |   | $                          | 2,407,360 |   |   | $ | 280,946 |   |   | $ | 2,126,414 |   |   |   | 757 | % |

|                         |   | Gross Profit |     |
|------------------------------|--------|-------------------|----------|
|                         |   | 2011              |     |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |              |     |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                 | (394,618 | ) |   | $ | 919,219 |   |   | $ | (1,313,837 | ) |   |   | (143 | )% |
| Six Months Ended March 31,   |   | $                 | (294,573 | ) |   | $ | 1,928,394 |   |   | $ | (2,222,967 | ) |   |   | (115 | )% |

|                    |         | General and Administrative Expenses |      |
|------------------------------|--------------|-------------------------------------|-----------|
|                    |    | 2011                                |      |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |         |                                |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |         | $                                   | 1,611,382 |   |   | $ | 3,138,052 |   |   | $ | (1,526,670 | ) |   |   | (49 | )% |
| Six Months Ended March 31,   |         | $                                   | 3,583,951 |   |   | $ | 7,099,942 |   |   | $ | (3,515,991 | ) |   |   | (50 | )% |

| ·       | Decreased compensation costs of approximately $816,000 reflecting the impacts of our restructuring actions and reduction in force during 2009 and 2010 from 111 employees at September 30, 2009 to 23 employees as of March 31, 2011;  |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | Other expense decreases of $199,000, including, but not limited to, rent and utilities, services and fees, office and supplies expenses, office closure expenses, travel and entertainment and other corporate expenses associated with our office closures, reductions in force and other cost containment initiatives;  |
|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | Decreased professional fees of approximately $484,000 related to reduced IT consulting of $175,000, legal fees of $128,000, investment banker fees of $95,000, accounting fees of $87,000, marketing consultants of $50,000 partially offset by increased fees from outside sales service costs of $24,000 and other miscellaneous consultants costs of $27,000;  |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | Decreased depreciation and amortization expense of $28,000; |
|---------------------------------------|-------------------------------------------------------------|

|   | · | Decreased compensation costs of approximately $2,121,000 reflecting the impacts of our restructuring actions and reduction in force during 2009 and 2010 from 111 employees at September 30, 2009 to 23 employees as of December 31, 2010; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Other expense decreases of $527,000, including, but not limited to, rent and utilities, services and fees, office and supplies expenses, office closure expenses, travel and entertainment and other corporate expenses associated with our office closures, reductions in force and other cost containment initiatives; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A reduction of $300,000 in damages paid in a legal settlement incurred in the first quarter of fiscal 2010; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

| ·       | Decreased professional fees of approximately $520,000 related to legal costs of $292,000 due to the resolution and wind-down of certain litigation activities, IT consultants of $112,000, investment banker fees of $146,000, accounting fees of $77,000, marketing consultants of $37,000 partially offset by outside sales service costs of $109,000 and other miscellaneous consultants costs of $35,000; |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | Decreased depreciation and amortization expense of $48,000; |
|---------------------------------------|-------------------------------------------------------------|

|                                               |   |   | Q2 2011 |   |   |   | Q1 2011 |   |   |   | Q4 2010 |   |   |   | Q3 2010 |   |   |   | Q2 2010 |   |
|----------------------------------------------------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|
| Compensation for employees, officers and directors |   | $      | 536,269      |   |   | $      | 936,426      |   |   | $      | 1,048,094    |   |   | $      | 967,323      |   |   | $      | 1,352,108    |   |
| Professional fees                                  |   |   | 539,950      |   |   |   | 453,062      |   |   |   | 551,394      |   |   |   | 677,507      |   |   |   | 1,023,582    |   |
| Depreciation and amortization                      |   |   | 190,254      |   |   |   | 205,477      |   |   |   | 214,617      |   |   |   | 215,102      |   |   |   | 218,200      |   |
| Other general and administrative costs             |   |   | 344,909      |   |   |   | 377,604      |   |   |   | 462,278      |   |   |   | 497,865      |   |   |   | 544,162      |   |

|                    |   | Sales and Marketing Expenses |   |
|------------------------------|--------|---------------------------------------------|--------|
|                         |   | 2011                                        |   |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                                           | 23,183 |   |   | $ | 90,054 |   |   | $ | (66,871 | ) |   |   | (74 | )% |
| Six Months Ended March 31,   |   | $                                           | 36,775 |   |   | $ | 261,111 |   |   | $ | (224,336 | ) |   |   | (86 | )% |

|                    |   | Operating Income (Loss) |       |
|------------------------------|--------|-----------------------------------|------------|
|                         |   | 2011                              |       |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                              |       |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                                 | (2,029,183 | ) |   | $ | (2,308,887 | ) |   | $ | 279,704 |   |   |   | (12 | )% |
| Six Months Ended March 31,   |   | $                                 | (3,915,299 | ) |   | $ | (5,432,659 | ) |   | $ | 1,517,360 |   |   |   | (28 | )% |

|                    |   | Total Other Income (Expense) |   |
|------------------------------|--------|---------------------------------------------|--------|
|                         |   | 2011                                        |   |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                                           | (310   | ) |   | $ | (19,085 | ) |   | $ | 18,775 |   |   |   | (98 | )% |
| Six Months Ended March 31,   |   | $                                           | 1,252  |   |   | $ | 37,825 |   |   | $ | (36,573 | ) |   |   | (97 | )% |

----

|                    |   | Income Tax Provision (Benefit) |   |
|------------------------------|--------|-----------------------------------------------|--------|
|                         |   | 2011                                          |   |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                                             | -      |   |   | $ | (330,357 | ) |   | $ | 330,357 |   |   |   | (100 | )% |
| Six Months Ended March 31,   |   | $                                             | -      |   |   | $ | (230,382 | ) |   | $ | 230,382 |   |   |   | (100 | )% |

|                    |   | Income (Loss) from Discontinued Operations |     |
|------------------------------|--------|----------------------------------------------------------------|----------|
|                         |   | 2011                                                           |     |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                                                           |     |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                                                              | (285,207 | ) |   | $ | 224,095 |   |   | $ | (509,302 | ) |   |   | (227 | )% |
| Six Months Ended March 31,   |   | $                                                              | (131,047 | ) |   | $ | 865,279 |   |   | $ | (996,326 | ) |   |   | (115 | )% |

|                    |   | Net Income (Loss) |       |
|------------------------------|--------|-----------------------------|------------|
|                         |   | 2011                        |       |   | 2010 |   |   | Change |   |   | Percent |   |
|                         |   |                        |       |   |   |   |   |   |   |   |   |   |
| Three Months Ended March 31, |   | $                           | (2,314,700 | ) |   | $ | (1,773,520 | ) |   | $ | (541,180 | ) |   |   | 31 | % |
| Six Months Ended March 31,   |   | $                           | (4,045,094 | ) |   | $ | (4,299,173 | ) |   | $ | 254,079 |   |   |   | (6 | )% |

----

|                                  |   | Payments Due by Fiscal Year |      |   |   |   |
|--------------------------------------------|--------|-------------------------------------------------|-----------|--------|--------|--------|
|                                       |   | Total                                           |      |   | 2011   |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | Thereafter |   |
| Operating lease commitments                |   | $                                               | 644,268   |   |   | $      | 205,497 |   |   | $ | 348,871 |   |   | $ | 89,900 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Capital lease commitments                  |   |                                            | 69,488    |   |   |   | 32,071 |   |   |   | 37,417 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Noncanceleable service contracts |   |                                            | 472,458   |   |   |   | 334,458 |   |   |   | 138,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                       |   | $                                               | 1,186,214 |   |   | $      | 572,026 |   |   | $ | 524,288 |   |   | $ | 89,900 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

----

----

|   | § | the pace of expansion of our operations; |
|--------|--------|------------------------------------------|

|   | § | our need to respond to competitive pressures; and |
|--------|--------|---------------------------------------------------|

|   | § | future acquisitions of complementary products, technologies or businesses. |
|--------|--------|----------------------------------------------------------------------------|

----

| ExhibitNumber |   | Description                                                                                                                                                                                                                                                                                                                                                                            |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1          |   | Stock Purchase Agreement, dated as of March 22, 2011, by and between the Registrant and each of Joint Corporation FeelTech Investment Unit 2, Joint Corporation FeelTech Investment Unit 3, Joint Corporation FeelTech Investment Unit 4, Joint Corporation FeelTech Investment Unit 5, Joint Corporation FeelTech Investment Unit 6, and Joint Corporation FeelTech Investment Unit 7 |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2          |   | Employment Agreement, dated as of March 24, 2011, by and between the Registrant and Kevin A. Hall                                                                                                                                                                                                                                                                                      |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 31            |   | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 32            |   | Section 1350 Certifications                                                                                                                                                                                                                                                                                                                                                            |

----

|                | LiveDeal, Inc.          |
|---------------------|-------------------------|
|                |                    |
| Dated: May 16, 2011 | /s/ Lawrence W. Tomsic  |
|                | Lawrence W. Tomsic      |
|                | Chief Financial Officer |

----

| ExhibitNumber |   | Description                                                                                                                                                                                                                                                                                                                                                                            |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1          |   | Stock Purchase Agreement, dated as of March 22, 2011, by and between the Registrant and each of Joint Corporation FeelTech Investment Unit 2, Joint Corporation FeelTech Investment Unit 3, Joint Corporation FeelTech Investment Unit 4, Joint Corporation FeelTech Investment Unit 5, Joint Corporation FeelTech Investment Unit 6, and Joint Corporation FeelTech Investment Unit 7 |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2          |   | Employment Agreement, dated as of March 24, 2011, by and between the Registrant and Kevin A. Hall                                                                                                                                                                                                                                                                                      |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 31            |   | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 32            |   | Section 1350 Certifications                                                                                                                                                                                                                                                                                                                                                            |

----