UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



|ý |  | QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE          
|- |  | -----------------------------------------------------------------
|  |  | SECURITIES EXCHANGE ACT OF
1934                                  
|  |  |                                                                  
|  |  | For the quarterly period ended September 30, 2009                
|  |  |                                                                  
|  |  | OR                                                               
|  |  |                                                                  
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE         
|  |  | SECURITIES EXCHANGE ACT OF
1934                                  
|  |  |                                                                  
|  |  | For the transition period from ______________ to
________________

Commission file number:  000-51134

MMR INFORMATION SYSTEMS, INC.(Exact name of Registrant as Specified in Its Charter)

|DELAWARE                                                                                                                              |  | 33-0892797                                                                                                 
|------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------
|(State or Other Jurisdiction of 
                                                                      Incorporation or Organization) |  | (I.R.S. Employer 
                                                                      Identification No.)
|                                                                                                                                      |  |                                                                                                            
|468 CAMDEN DRIVE, SUITE 200
BEVERLY HILLS, CA                                                                                         |  | 90210                                                                                                      
|(Address of Principal Executive Offices)                                                                                              |  | (Zip Code)                                                                                                 

(310) 476-7002

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes x
         No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files).

Yes o
         No  o

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

Large accelerated filer o
                  Accelerated filer  o

Non-accelerated filer  o
  (Do not check if a smaller reporting company)   Smaller reporting company  x

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable
date:  As of November 12, 2009, the issuer had 154,031,783 shares of common stock outstanding.




TABLE OF CONTENTS

|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  | Page
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  |  |  |  | ----
|Part I.    |  | FINANCIAL INFORMATION                                                                                                                 |  |  |  |  |  |  |  |  |  |  | 1   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 1.    |  | Consolidated Financial Statements                                                                                                     |  |  |  |  |  |  |  |  |  |  | 1   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|           |  | Consolidated Balance Sheets at September 30, 2009 (unaudited) and December 31, 2008                                                   |  |  |  |  |  |  |  |  |  |  | 1   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|           |  | Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited) |  |  |  |  |  |  |  |  |  |  | 2   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|           |  | Consolidated Statement of Stockholders' Deficit - Nine Months Ended September 30, 2009 (unaudited)                                    |  |  |  |  |  |  |  |  |  |  | 3   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|           |  | Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited)           |  |  |  |  |  |  |  |  |  |  | 4   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|           |  | Notes to Consolidated Financial Statements (unaudited)                                                                                |  |  |  |  |  |  |  |  |  |  | 5   
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 2.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                 |  |  |  |  |  |  |  |  |  |  | 27  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                            |  |  |  |  |  |  |  |  |  |  | 44  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 4T.   |  | Controls and Procedures                                                                                                               |  |  |  |  |  |  |  |  |  |  | 44  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Part II.   |  | OTHER INFORMATION                                                                                                                     |  |  |  |  |  |  |  |  |  |  | 45  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|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                                                                                                       |  |  |  |  |  |  |  |  |  |  | 46  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                                   |  |  |  |  |  |  |  |  |  |  | 46  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 5.    |  | Other Information                                                                                                                     |  |  |  |  |  |  |  |  |  |  | 46  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Item 6.    |  | Exhibits                                                                                                                              |  |  |  |  |  |  |  |  |  |  | 46  
|           |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |     
|Signatures |  |                                                                                                                                       |  |  |  |  |  |  |  |  |  |  | 47  

i

---



PART I - FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

MMR INFORMATION SYSTEMS, INC. 
                                 CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                               |  |   | September 30, |  |   | December 31,
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------- |  | - | ------------
|                                                                                                                                                                                                               |  |   | 2009          |  |   | 2008        
|                                                                                                                                                                                                               |  |   | (Unaudited)   |  |   |             
|ASSETS                                                                                                                                                                                                        
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Current assets:                                                                                                                                                                                                |  |   |               |  |   |             
|Cash and cash equivalents                                                                                                                                                                                      |  | $ | 450,769       |  | $ | 75,779      
|Accounts receivable, net of allowance for doubtful accounts of $0 (unaudited)
        and $0 as of September 30, 2009 and December 31, 2008, respectively                                                      |  |   | 24,968        |  |   | 6,928       
|Related party receivables                                                                                                                                                                                      |  |   | -             |  |   | 22,057      
|Deferred financing costs                                                                                                                                                                                       |  |   | 97,143        |  |   | 29,167      
|Prepaid expenses and other current assets                                                                                                                                                                      |  |   | 675,464       |  |   | 53,304      
|Total current assets                                                                                                                                                                                           |  |   | 1,248,344     |  |   | 187,235     
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Property and equipment, net                                                                                                                                                                                    |  |   | 39,900        |  |   | 47,050      
|Deposits                                                                                                                                                                                                       |  |   | 7,745         |  |   | 1,885       
|Advances due from related party                                                                                                                                                                                |  |   | -             |  |   | 100,000     
|Intangible assets, net                                                                                                                                                                                         |  |   | 261,088       |  |   | 128,484     
|Total assets                                                                                                                                                                                                   |  | $ | 1,557,077     |  | $ | 464,654     
|                                                                                                                                                                                                               |  |   |               |  |   |             
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                                         
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Current liabilities:                                                                                                                                                                                           |  |   |               |  |   |             
|Line of credit, related party                                                                                                                                                                                  |  | $ | 1,007,010     |  | $ | 822,520     
|Advances from affiliate                                                                                                                                                                                        |  |   | -             |  |   | 701,322     
|Related party payables                                                                                                                                                                                         |  |   | 704,962       |  |   | 513,688     
|Compensation payable                                                                                                                                                                                           |  |   | 47,683        |  |   | 58,188      
|Severance liability                                                                                                                                                                                            |  |   | 620,613       |  |   | -           
|Accounts payable and accrued expenses                                                                                                                                                                          |  |   | 2,892,753     |  |   | 944,438     
|Deferred revenue                                                                                                                                                                                               |  |   | 30,011        |  |   | 189,824     
|Warrant liability                                                                                                                                                                                              |  |   | 88,998        |  |   | -           
|Derivative liability                                                                                                                                                                                           |  |   | 1,702,588     |  |   | -           
|Conversion feature liability                                                                                                                                                                                   |  |   | 58,226        |  |   | -           
|Convertible note payable                                                                                                                                                                                       |  |   | 76,313        |  |   | -           
|Notes payable, current portion                                                                                                                                                                                 |  |   | 288,157       |  |   | -           
|Capital leases payable, current portion                                                                                                                                                                        |  |   | 10,111        |  |   | 6,929       
|Total current liabilities                                                                                                                                                                                      |  |   | 7,527,425     |  |   | 3,236,909   
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Notes payable, less current portion                                                                                                                                                                            |  |   | 162,186       |  |   | -           
|Capital leases payable, less current portion                                                                                                                                                                   |  |   | 10,474        |  |   | 16,151      
|Total liabilities                                                                                                                                                                                              |  |   | 7,700,085     |  |   | 3,253,060   
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Commitments and contingencies (See Note 6)                                                                                                                                                                     |  |   |               |  |   |             
|                                                                                                                                                                                                               |  |   |               |  |   |             
|Stockholders' deficit:                                                                                                                                                                                         |  |   |               |  |   |             
|Preferred stock - $0.001 per value, 5,000,000 shares authorized, none issued and outstanding                                                                                                                   |  |   | -             |  |   | -           
|Common stock, $0.001 par value, 650,000,000 shares authorized, 151,625,775 (unaudited)
       and 80,629,266 shares issued and outstanding as of September 30, 2009 
       and December 31 2008, respectively |  |   | 151,625       |  |   | 80,629      
|Treasury stock, at cost, 0 and 1,145,324 shares as of September 30, 2009 (unaudited)
       and December 31, 2008, respectively                                                                                |  |   | -             |  |   | (16,860)    
|Additional paid-in capital                                                                                                                                                                                     |  |   | 11,637,637    |  |   | 8,300,460   
|Accumulated deficit                                                                                                                                                                                            |  |   | (17,932,270)  |  |   | (11,152,635)
|Total stockholders' deficit                                                                                                                                                                                    |  |   | (6,143,008)   |  |   | (2,788,406) 
|Total liabilities and stockholders' deficit                                                                                                                                                                    |  | $ | 1,557,077     |  | $ | 464,654     

The accompanying notes are an integral part of these consolidated financial statements

1

---



MMR INFORMATION SYSTEMS, INC. 
                                       CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                     |  |  |   | Three Months Ended |  |   | Nine Months Ended
|---------------------------------------------------- |  |  | - | ------------------ |  | - | -----------------
|                                                     |  |  |   | September 30,      |  |   | September 30,    
|                                                     |  |  |   | 2009               |  |   | 2008             
|                                                     |  |  |   | (unaudited)        |  |   | (unaudited)      
|Revenues                                             |  |  |   |                    |  |   |                  
|Subscriber                                           |  |  | $ | 99,238             |  | $ | 71,385           
|License fees and other                               |  |  |   | 64,033             |  |   | 82,861           
|Total revenues                                       |  |  |   | 163,271            |  |   | 154,246          
|Cost of revenues                                     |  |  |   | 108,609            |  |   | 88,268           
|Gross profit (loss)                                  |  |  |   | 54,662             |  |   | 65,978           
|General and administrative expenses                  |  |  |   | 1,228,951          |  |   | 373,636          
|Sales and marketing expenses                         |  |  |   | 364,928            |  |   | 124,780          
|Technology development                               |  |  |   | 45,750             |  |   | 29,615           
|Loss from operations                                 |  |  |   | (1,584,967)        |  |   | (462,053)        
|Gain on settlement of payables                       |  |  |   | -                  |  |   | -                
|Change in valuation of derivative liabilities        |  |  |   | 979,309            |  |   | -                
|Interest and other expenses, net                     |  |  |   | (1,976,531)        |  |   | (42,413)         
|Net loss                                             |  |  |   | (2,582,189)        |  |   | (504,466)        
|Deemed dividend                                      |  |  |   | -                  |  |   | 35,507           
|Net loss available to common shareholders:           |  |  | $ | (2,582,189)        |  | $ | (539,973)        
|                                                     |  |  |   |                    |  |   |                  
|Net loss available to common shareholders per share: |  |  |   |                    |  |   |                  
|Basic and Diluted                                    |  |  | $ | (0.02)             |  | $ | (0.01)           
|                                                     |  |  |   |                    |  |   |                  
|Weighted average common shares outstanding:          |  |  |   |                    |  |   |                  
|Basic and Diluted                                    |  |  |   | 133,454,701        |  |   | 65,422,297       

The accompanying notes are an integral part of these consolidated financial statements

2

---

MMR INFORMATION SYSTEMS, INC. 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

Preferred Stock

Common Stock

Treasury Stock


Additional


AccumulatedShares


Amount

Shares


Amount

Shares


Amount


Paid-In Capital


Deficit


TotalBalance at December 31, 2008, as restated in terms of shares of Favrille, Inc.
-

$
-

80,629,266

$
80,629

(1,145,324)

$
(16,860)

$
8,300,460

$
(11,152,635)

$
(2,788,406)Reverse merger with Favrille, Inc.
-


-

41,254,550


41,254

-


-


441,346


-


482,600Shares and warrant issuances and stock option exercises - Robert Lorsch and the RHL Group
-


-

5,730,793


5,731

-


-


1,626,714


-


1,632,445Shares issued to replace options previously issued
-


-

57,263


57

1,145,324


16,860


(15,451)


-


1,466Reclassification of warrants and options to derivative liabilities
-


-

-


-

-


-


(2,055,862)


-


(2,055,862)Share sold
-


-

84,326


84

-


-


3,795


-


3,879Stock issued for services, liability deferral and reduction of liabilities
-


-

11,699,606


11,700

-


-


1,186,319


-


1,198,019Stock option exercises
-


-

3,589,415


3,589

-


-


185,307


-


188,896Stock based compensation
-


-

-


-

-


-


695,180


-


695,180Warrants issued for services and reduction of liabilities
-


-

-


-

-


-


415,795


-


415,795Convertible debt issuance, conversion and warrant exercises
-


-

8,205,556


8,206

-


-


821,034


-


829,240Warrant exercises
-


-

375,000


375

-


-


33,000


-


33,375Net loss
-


-

-


-

-


-


-


(6,779,635)


(6,779,635)Balance as of September 30, 2009 (unaudited)
-

$
-

151,625,775

$
151,625

-

$
-

$
11,637,637

$
(17,932,270)

$
(6,143,008)The accompanying notes are an integral part of these consolidated financial statements


3MMR INFORMATION SYSTEMS, INC. 
CONSOLIDATED STATEMENTS OF CASH FLOWS 

Nine Months EndedSeptember 30,2009


2008(Unaudited)


(Unaudited)Operating activities:Net loss



$
(6,779,635)

$
(2,190,591)Adjustments to reconcile net loss to net cashused in operating activities:Depreciation and amortization




65,677


111,823Change in allowance for doubtful accounts




-


1,040Common stock issued as consideration for extension of guarantee




5,000


-Common stock issued as replacement of options previously issued




1,466


-Loss on disposal of property and equipment




2,237


2,996Change in valuation of derivative liabilities




(324,048)


-Warrants issued for services




1,485,767


-Stock based compensation




695,180


8,918Restricted common stock issued for services




-


333,401Stock issued for services




345,914


-Interest expense on convertible debt




334,650


-Gain on settlement of payables




(89,170)


-Loss on stock settlement of liabilities




221,841


-Loss on write-off of advances due from related party




100,000


-Loan commitment fee amortization




142,857


-Effect of changes in:Accounts receivable




(18,040)


8,688Related party receivables




22,057


1,000Loan origination fees




-


8,333Prepaid expenses and other current assets




33,777


25,842Deposits




(5,860)


48,451Related party payables




478,279


323,357Compensation payable




12,495


24,799Accounts payable and accrued expenses




1,744,042


171,804Deferred revenue




(159,813)


17,731Deferred rent




-


(6,344)Net cash used in operating activities




(1,685,327)


(1,108,752)Investing activities:Purchase of property and equipment




(8,052)


(3,566)Proceeds from sale of property and equipment




-


2,226Patents




(107,087)


-Cash acquired from reverse merger with Favrille, Inc.




1,050,506


-Net cash provided by (used in) investing activities




935,367


(1,340)Financing activities:Payments of capital lease payable




(5,130)


(6,699)Proceeds from line of credit, related party




211,000


519,034Proceeds from issuance of note payable




125,000


-Proceeds from issuance of convertible notes




560,000


-Proceeds from stock option exercises




68,013Proceeds from warrant exercises




162,275Issuance of common stock




3,792


-Issuance of Preferred Stock - Series C, net of issuance cost




-


606,048Net cash provided by financing activities




1,124,950


1,118,383Net (decrease) in cash




374,990


8,291Cash, beginning of period




75,779


11,450Cash, end of period



$
450,769

$
19,741Supplemental disclosures of cash flow information:Cash paid for interest



$
901

$
18,616Cash paid for income taxes



$
1,989

$
800Supplemental disclosure of non-cash investing and financing activities:Payment of payables through issuance of notes payable



$
139,355

$
-Capitalized loan commitment fees payable



$
230,000

$
-Payment of payables and loan origination fee through issuance of warrants



$
61,880

$
-Convertible Note discount upon issuance



$
141,664

$
-Conversion of 12% Convertible Note



$
400,000

$
-Establishment of Derivative Liabilities



$
2,592,749

$
-Payment of related party line of credit, related party payables,accounts payable, compensation payable and loan origination feesthrough issuance of common stock



$
1,007,483

$
50,000Pre-payment for services through issuance of common stock



$
461,184

$
-The accompanying notes are an integral part of these consolidated financial statements


4MMR INFORMATION SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2009

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

On January 27, 2009, MMR Information Systems, Inc. ("MMRIS"), (formerly known as Favrille, Inc. ("Favrille"), a Delaware
corporation formed in January 2000, and hereinafter referred to as the "Company") consummated a business combination with
MyMedicalRecords, Inc. (formerly known as mymedicalrecords.com, Inc., a Delaware corporation formed in 2005) ("MMR") through a
merger of a wholly-owned subsidiary of MMRIS with and into MMR pursuant to the terms of the Agreement and Plan of Merger and
Reorganization dated November 8, 2008 (the "Merger"). Pursuant to the terms of the Merger, all of the outstanding common and
preferred stock of MMR was cancelled and the former stockholders of MMR received an aggregate of 79,812,116 shares of Favrille
common stock. In addition, MMRIS assumed the obligations of MMR under its outstanding stock options and warrants, which, pursuant to
the terms of the Merger, represented the right to receive an aggregate 12,787,080 shares of MMRIS common stock at the effective time of
the Merger. In connection with the Merger, MMR became a wholly-owned subsidiary of the Company, with the former stockholders of MMR
collectively owning shares of the Company's common and preferred stock representing approximately 60.3% of the voting power of the
Company's outstanding capital stock.
For accounting purposes, the Merger was treated as a reverse acquisition with MMR being the accounting acquirer. Accordingly, the
historical financial results prior to the Merger are those of MMR. The results of operations for MMRIS are included in the Company's
consolidated financial results beginning on January 27, 2009.
The presentation of consolidated statements of stockholders' equity (deficit) reflects the historical stockholders' equity (deficit) of MMR
through January 26, 2009. The effect of the issuance of shares of MMRIS common stock in connection with the Merger and the inclusion of
MMRIS's outstanding shares of common stock at the time of the Merger on January 27, 2009 is reflected in the nine months ended
September 30, 2009.
The Company, headquartered in Los Angeles, California, seeks to empower consumers and medical professionals by facilitating access
to consumer medical records and associated vital documents (such as living wills, birth certificates and insurance policies). The Company
offers consumers an easy-to-use, secure web-based product that allows documents, images and voice mail messages to be transmitted in
and out of the Company's proprietary system using a variety of methods, including fax, file upload and email.
Principles of Consolidation
The consolidated financial statements include the accounts of MMRIS, and its wholly-owned subsidiaries MMR and Montana
Merger Sub, Inc. All intercompany transactions have been eliminated upon consolidation.
Basis of Presentation
The accompanying consolidated unaudited financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial statements and with instructions to Form 10-Q
pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended (the "Exchange Act") and Article 8-03 of
Regulation S-X under the Exchange Act. Accordingly, they do not include all of the information and footnotes required by U.S. Generally
Accepted Accounting Principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments considered
necessary (consisting of normal recurring adjustments) for a fair presentation are included herein. Operating results for the three and nine
month periods ended September 30, 2009 are not indicative of the results that may be expected for the fiscal year ending December 31,
2009. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the notes
thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2008, and in the Company's current report
on Form 8-K/A filed on May 4, 2009.

5On July 1, 2009, MMRIS adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 105-10 (formerly Statement of Financial Accounting Standards ("SFAS") No. 168, The FASB Accounting
Standards Codification and Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162). ASC 105-10
establishes the FASB ASC as the source of authoritative accounting principles recognized by the FASB to be applied in preparation of
financial statements in conformity with generally accepted accounting principles in the United States of America. The adoption of this
standard had no impact on the Company's consolidated financial statements.
Management's Plan
The Company has incurred net losses of approximately $3.5 million for the year ended December 31, 2008 and approximately
$6.8 million (unaudited) for the nine months ended September 30, 2009, and has an accumulated deficit of approximately $17.9 million
(unaudited) as of September 30, 2009. Furthermore, its current liabilities exceed its current assets by approximately $6.3 million (unaudited)
as of September 30, 2009.
Historically, the Company issued capital stock and received funds from The RHL Group, Inc. ("The RHL Group") (a significant
shareholder wholly-owned by the Company's Chairman and Chief Executive Officer) to operate its business. At December 31, 2008 and
September 30, 2009, the Company had $75,779 and $450,769  (unaudited), respectively, in cash and cash equivalents, and although it
received additional funding from The RHL Group pursuant to the Third Amended and Restated Note dated April 29, 2009, it nevertheless
will still be required to obtain additional financing in order to meet installment payment obligations resulting from settlement payments with
various creditors (the "Creditor Plan") and the previously existing obligations under the subordinated secured indebtedness to The RHL
Group, which note payable had a balance of $1,678,071 (unaudited) at September 30, 2009.
As a result of the above, there is uncertainty about the Company's ability to continue as a going concern.
Management's plan regarding this matter is to continue to utilize its available line of credit with The RHL Group (see Note 3). If the
Company is unable to utilize its available line of credit with The RHL Group, or obtain suitable alternative debt financing, it may adversely
affect the Company's ability to execute its business plan and continue as a going concern.
Additionally, the Company plans to continue to sell additional equity securities, explore other debt financing arrangements and continue
to increase its existing customer base to obtain additional cash flow over the next twelve months. There can be no assurance that funds
from these sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If additional funds
are raised by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience
additional dilution or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common
stock.
On September 15, 2009, the Company entered into an Investment Agreement with Dutchess Equity Fund, L.P., or
"Dutchess."  Pursuant to the Investment Agreement, Dutchess committed to purchase up to $8,000,000 of the Company's
common stock, over the course of 60 months.  The aggregate number of shares issuable by the Company and purchasable by Dutchess
under the Investment Agreement is 100,000,000.  The Company may draw on the facility from time to time, as and when the Company
determines it is appropriate in accordance with the terms and conditions of the Investment Agreement.  The maximum amount that the
Company is entitled to put in any one notice is the greater of (i) 200% of the average daily volume (U.S. market only) of the common stock
for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such
trading days or (ii) $150,000. The purchase price shall be set at ninety-four percent (94%) of the lowest closing best bid of the Company's
common stock during the pricing period. The Company has filed the Form S-1 pursuant to the agreement but it is not yet effective. As of
September 30, 2009, the Company has not drawn down on the facility.

6NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) MANAGEMENT'S USE OF ESTIMATES
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and
expenses during each reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue
recognition, allowances for doubtful accounts, the valuation of deferred income taxes, tax contingencies, long-lived and intangible assets
and stock-based compensation. These estimates are based on historical experience and on various other factors that it believes to be
reasonable under the circumstances. Actual results could differ from those estimates.
(b) CASH AND CASH EQUIVALENTS
The Company considers cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with
maturities of 90 days or less at the purchase date. The Company maintains its cash in bank deposit accounts which, at times, may exceed
federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant
credit risk on cash.
(c) TRADE AND OTHER RECEIVABLES
Receivables represent claims against third parties that will be settled in cash. The carrying value of receivables, net of an
allowance for doubtful accounts, if any, represents their estimated net realizable value. The allowance for doubtful accounts, if any, is
estimated based on historical collection trends, type of customer, the age of outstanding receivables and existing economic conditions. If
events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the
collectability of those balances and the allowance is adjusted accordingly. Past due receivable balances are written-off when collection
efforts have been unsuccessful in collecting the amount due.
(d) FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820-10 (formerly SFAS No. 157, Fair Value Measurements) requires entities to disclose the fair value of financial
instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value.
ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties. As of December 31, 2008 and September 30, 2009 (unaudited), the carrying value of accounts
receivable, related party payables and receivables, deposits and accounts payable and accrued expenses approximates fair value due to
the short-term nature of such instruments. The carrying value of short-term debt approximates fair value as the related interest rates
approximate rates currently available to the Company.
The Company utilizes ASC 820-10 for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair
value, establishes a framework for measuring fair value and generally accepted accounting principles and expands disclosures about fair
value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value
measurements. ASC 820-10 does not require any new fair value measurements.
Accounting guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value.


7The standard describes three levels of inputs that may be used to measure fair value:

Level  1:
Quoted prices in active markets for identical or similar assets and liabilities.Level  2:
Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than
quoted prices in active markets for identical or similar assets and liabilities.Level  3:
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities.In determining the appropriate fair value of the option, warrant and conversion feature liabilities, the Company used
Level 2 inputs for its valuation methodology. The Company applied the Black-Scholes model to value the option, warrant and conversion
feature liabilities. See Note 8 for the inputs used in the Black-Scholes option valuation model.

Fair Value Measurements atSeptember 30, 2009Fair Value  
as of

Using Fair Value HierarchyFinancial Instruments

September 30, 2009

Level 1

Level 2

Level 3Liabilities:Warrant liability

88,998

-

88,998

-Derivative liability

1,702,588

-

1,702,588

-Conversion feature liability

58,226

-

58,226

-Total

1,849,812

-

1,849,812

-(e) PROPERTY AND EQUIPMENTProperty and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease
payments. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives:
Furniture and Fixtures: 5 Years
Computer Equipment: 5 Years
When items are retired or disposed of, income is charged or credited for the difference between the net book value of the asset and the
proceeds realized thereon.
Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.

All property and equipment, along with all other assets of the Company, are pledged as collateral for a line of credit from a related party
(see Note 3 - Related Party Note Payable).

8(f) INTANGIBLE ASSETS
Intangible assets are comprised of website development costs, domain names and patents. The Company accounts for website
development costs in accordance with ASC 350-50 (formerly Emerging Issues Task Force ("EITF") No. 00-2, "Accounting for Website
Development Costs") and ASC 985-20 (formerly SFAS No. 86 "Accounting for the Costs of Computer Software to Be Sold,
Leased, or Otherwise Marketed"). Pursuant to ASC 350-50 and 985-20, the Company capitalizes internally developed website
costs when the website under development has reached technological feasibility. These costs are amortized, typically over an estimated life
of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between
current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet
date, the Company evaluates the unamortized capitalized website costs compared to the net realizable value. The amount by which the
unamortized capitalized website costs exceed its net realizable value is written off. During the nine months ended September 30, 2009
(unaudited), there were no amounts written off.
The Company accounts for domain names and patents in accordance with ASC 350-30 and ASC 360 (formerly SFAS No. 142,
"Goodwill and Other Intangible Assets"). The Company capitalizes patent costs representing legal fees associated with filing patent
applications and amortizes them on a straight-line basis. The Company is in the process of evaluating the patents' estimated useful life and
will begin amortizing the patents when they are brought to the market. Identifiable intangible assets are amortized over their estimated
useful lives as follows:
Website Development Costs: 5 Years
Domain Name: 5 Years
(g) IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES
The Company accounts for long-lived assets, which include property and equipment and identifiable intangible assets with finite
useful lives (subject to amortization), in accordance with ASC 350-30 (formerly SFAS No. 144 "Accounting for the Impairment or Disposal
of Long-LivedAssets"). ASC 350-30 requires that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying
amount of an asset to the expected future undiscounted net cash flows generated by the asset. If it is determined that the asset may not be
recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized
to the extent of the difference between the fair value and the asset's carrying amount.
The Company assessed whether events or changes in circumstances have occurred that potentially indicates the carrying amount of
long-lived assets may not be recoverable. The Company had no impairment charges during the nine months ended September 30, 2009
and 2008 (unaudited).
(h) REVENUE RECOGNITION
The Company's revenues are derived from services, which are comprised of providing electronic access to consumer medical
records and other vital documents and from the licensing of its services. Revenue is recognized only when the price is fixed or determinable,
persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably
assured.

9The Company's subscriber revenues consist of annual and monthly recurring retail subscriptions and usage-based fees, which are
primarily paid in advance by credit card, and corporate accounts that are based on either an access-fee or actual number of users, and in
each case billed in advance at the beginning of each month of service. The Company defers the portions of annual recurring subscription
fees collected in advance and recognizes them on a straight line basis over the subscription period.
The Company grants exclusive licenses for the sale and marketing of its services in international territories in consideration of an
up-front license fee and an ongoing royalty. The royalty fee is usually a percentage of revenue earned by the licensee and there usually are
certain minimum guarantees. License fee revenues received in advance from international licensees for the grant of the license are deferred
and recognized over the period covered by the agreement. Minimum guaranteed royalty payments received in advance are deferred and
recognized over the period to which the royalty relates. All such revenues are included under "License Fees and Other." In those cases
where a license agreement contains multiple deliverables, the agreement is accounted for in accordance with ASC 605-025 (formerly EITF
00-21, "Revenue Arrangements with Multiple Deliverables").
(i) INCOME TAXES AND UNCERTAIN TAX POSITIONS
The Company accounts for income taxes in accordance with ASC 740-10 (formerly SFAS No. 109, "Accounting for Income
Taxes"). The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at currently
effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the
financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the
deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of
the date of enactment.
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial
statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods,
disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date,
there have been no interest or penalties assessed or paid.
(j) ADVERTISING
The Company expenses advertising costs as incurred.
(k) SHARE-BASED COMPENSATION
The Company accounts for share-based compensation in accordance with ASC 718-20 (formerly SFAS No. 123(R), "Share
Based Payments"). The Company applies ASC 718-20 in accounting for stock-based awards issued to employees under the recognition
of compensation expense related to the fair value of employee share-based awards, including stock options and restricted stock.
Determining the fair value of options at the grant date requires judgment, including estimating the expected term that stock options will be
outstanding prior to exercise, the associated volatility and the expected dividends. Judgment is required in estimating the amount of
share-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, share-based
compensation expense could be materially impacted.

10The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model. Assumptions relative
to volatility and anticipated forfeitures are determined at the time of grant. During the nine months ended September 30, 2008 (unaudited),
there were no stock option or warrant grants. Grants of stock options and warrants during the nine months ended September 30, 2009
(unaudited) were valued using the following assumptions:

Stock Options

WarrantsNine Months Ended September 30, 2009Expected life in years

5 years

1 - 5 yearsStock price volatility

104.43% - 104.72%

103.28% - 179.12%Risk free interest rate

2.16% - 2.73%

0.60% - 2.69%Expected dividends

None

NoneForfeiture rate

0%

0%The assumptions used in the Black-Scholes models are based upon the following data: (1) The Company uses the contractual life of the
underlying warrant as the expected life; the expected life of the options used in this calculation is the period of time the options are expected
to be outstanding and has been determined based on historical exercise experience. (2) In the absence of an extensive public market for the
Company's shares, the expected stock price volatility of the underlying shares over the expected term of the option or warrant was taken at
approximately the mid-point of the range for similar companies at the various grant dates. (3) The risk free interest rate is based on
published U.S. Treasury Department interest rates for the expected terms of the underlying options or warrants. (4) Expected dividends are
based on historical dividend data and expected future dividend activity. (5) The expected forfeiture rate is based on historical forfeiture
activity and assumptions regarding future forfeitures based on the composition of current grantees.
Options issued to non-employees are accounted for in accordance with ASC 505-50 (formerly EITF No. 96-18 "Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,"
and EITF No. 00-18 "Accounting Recognition for Certain Transactions involving Equity Instruments Granted to Other Than
Employees"). Options issued to non-employees are are treated the same as those issued to employees with the exception of
determination of the measurement date.  The measurement date is the earlier of (1) the date at which a commitment for performance by the
counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Options granted
to consultants are valued at their respective measurement dates, and recognized as expense based on the portion of the total consulting
services provided during the applicable period. As further consulting services are provided in future periods, the Company will revalue the
associated options and recognize additional expense based on their then current values.
(l) NET INCOME/LOSS PER SHARE
The Company applies the guidance of ASC 260-010 (formerly SFAS No. 128, "Earnings Per Share") for
calculating the basic and diluted loss per share. Basic loss per share is calculated by dividing the net loss attributable to common
shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per
share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the
potential shares had been issued and if the additional shares were dilutive. Common equivalent shares are excluded from the computation
of net loss per share if their effect is anti-dilutive.

11All potential common shares were excluded from the computation of diluted net loss per common share for the three and nine months
ended September  30, 2009 and for the three and nine months ended September 30, 2008 because they were anti-dilutive due to the
Company's net loss position. Stock options, warrants and convertible notes excluded from the computation totaled 58,282,948 shares for the
three and nine months ended September 30, 2009 and 11,617,354 shares for the three and nine months ended September 30, 2008.
(m) RESEARCH, DEVELOPMENT AND ENGINEERING
Research, development and engineering costs are expensed as incurred. Costs for software development relating to our website
incurred subsequent to establishing technological feasibility, in the form of a working model, are capitalized and amortized over their
estimated useful lives.
(n) CONCENTRATIONS
For the three months ended September 30, 2009 (unaudited) and 2008 (unaudited), there were three customers representing a
combined 66.3% and 69.8%, respectively, of the Company's revenue. For the nine months ended September 30, 2009 (unaudited) and
2008 (unaudited), these same three customers represented a combined 71.4% and 69.3%, respectively, of the Company's revenue.
(o) RECENT ACCOUNTING PRONOUNCEMENTS
The following recently issued but not yet enacted accounting standards have not yet been codified by the FASB, as described in
Note 1, "Basis of Presentation."
In June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets - an amendment of FASB Statement
No. 140". SFAS No. 166 amends SFAS No. 140, "Accounting for the Transfers and Servicing of Financial Assets and the
Extinguishments of Liabilities," and seeks to improve the relevance and comparability of the information that a reporting entity provides
in its financial statements about transfers of financial assets; the effects of the transfer on its financial position, financial performance, and
cash flows; and a transferor's continuing involvement, if any, in transferred financial assets. SFAS No. 166 eliminates the concept of a
qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies
other sale-accounting criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS No. 166 is
effective for interim and annual reporting periods beginning after November 15, 2009. The Company does not expect the adoption of SFAS
No. 166 to have a material impact on its consolidated financial statements.

In June 2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No. 46(R). SFAS No. 167 amends FASB
Interpretation No. ("FIN") 46, Consolidation of Variable Interest Entities (revised December 2003) - an interpretation of ARB No. 51,
which requires an enterprise to determine whether its variable interest or interests give it a controlling financial interest in a variable interest
entity. The primary beneficiary of a variable interest entity is the enterprise that has both (1) the power to direct the activities of a variable
interest entity that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the
variable interest entity. SFAS No. 167 also amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary
beneficiary of a variable interest entity. SFAS No. 167 is effective for interim and annual reporting periods beginning after November 15,
2009. The Company does not expect the adoption of SFAS No. 167 to have an impact on its consolidated financial statements.

12In May 2009, the FASB issued additional guidance related to ASC Topic No. 855, "Subsequent Events" (ASC 855).
ASC 855 establishes that management must evaluate, as of each reporting period, events or transactions that occur for potential recognition
or disclosure in the financial statements and the circumstances under which an entity should recognize events or transactions occurring
after the balance sheet date through the date that the financial statements are issued or available to be issued. It also requires the
disclosure of the date through which an entity has evaluated subsequent events. The Company adopted ASC 855 for the period ending
June 30, 2009. The required disclosures are included in Note 13, "Subsequent Events".
In April 2009, the FASB issued additional guidance related to ASC Topic No. 820, "Fair Value Measurements and
Disclosures" (ASC 820). ASC 820 provisions define fair value, establish a framework for measuring fair value and expand
disclosure requirements. The new guidance emphasizes that even if there has been a significant decrease in the volume and level of
activity, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants. The guidance
provides a number of factors to consider when evaluating whether there has been a significant decrease in the volume and level of activity
for an asset or liability in relation to normal market activity. In addition, when transactions or quoted prices are not considered orderly,
adjustments to those prices based on the weight of available information may be needed to determine the appropriate fair value. The
guidance also requires increased disclosures. The Company adopted the new guidance for the period ending June 30, 2009, and it did not
have a material impact on the Consolidated Financial Statements. The required disclosures are included in Note 2, "Fair Value of
Financial Instruments".
In April 2009, the FASB issued additional guidance related to ASC Topic No. 825, "Financial Instruments" (ASC 825).
ASC 825 establishes additional disclosure requirements of fair values for certain financial instruments in the interim financial statements.
The Company adopted the new guidance for the period ending June 30, 2009. The required disclosures are included in Note 2, "Fair
Value of Financial Instruments".

NOTE 3 - RELATED PARTY NOTE PAYABLE
On July 31, 2007, MMR entered into a promissory note agreement and a security agreement with The RHL Group, a corporation
wholly owned by Robert H. Lorsch, the Chairman and CEO of the Company, to borrow up to $100,000 under a revolving line of credit. This
agreement was subsequently superseded by an amended and restated promissory note on August 23, 2007 under the terms of which the
line amount was increased to $1 million. On April 29, 2009, the Company agreed to restructure MMR's secured credit facility with The RHL
Group and entered into a Secured Credit Restructuring Agreement with MMR, The RHL Group and Mr. Lorsch, (the "Restructuring
Agreement"). MMR issued The RHL Group a Third Amended and Restated Note (the "Third Amended Note"), and the Company agreed to
guaranty MMR's obligations under the Third Amended Note (the "Guaranty").
The Third Amended Note amends and restates the previous The RHL Group note ("RHL Group Note"), matures November 30, 2009,
and bears interest at the lesser of 10% or the highest rate then permitted by law, and is secured (similar to the previous note) by the
Security Agreement. Although the reserve credit line has been increased to $3,000,000, The RHL Group is only obligated to make a
minimum of $100,000 of loans, advances and guarantees under the Third Amended Note within 30 days of execution pursuant to the
Restructuring Agreement. The RHL Group Note payable had a balance of $1,678,071 (unaudited) at September 30, 2009. The components
of the $1,678,071 Group Note payable and the related balance sheet presentation as of September 30, 2009 are: (1) $1,007,010, which is
included in the line of credit, related party payable; (2) $301,343, which is related to bank overdrafts, credit card charges and a vendor
guaranty is included in accounts payable and accrued expenses; and (3) $369,718, which is related to deferred salary and consulting
expenses is included in related party payables. The RHL Group was due to receive, as an origination fee ("Fee"), a promissory note for
$200,000, bearing interest at 10% per annum and due on demand. On August 17, 2009, the Company paid the $200,000 origination fee by
granting 2,800,000 shares of common stock to The RHL Group to the value of $364,000 and recorded a loss on issuance of $164,000. The
origination fee was recorded as a deferred financing cost and is being amortized over the Third Amended Note maturity period. As of
September 30, 2009 the unamortized origination fee was $57,143 and is included in the $97,143 total deferred financing cost.

13Interest expense on this note for the three months ended September 30, 2009 and 2008 amounted to $39,587 (unaudited) and $19,098
(unaudited), respectively. Interest expense on this note for the nine months ended September 30, 2009 and 2008 amounted to $87,656
(unaudited) and $42,054 (unaudited), respectively. The unpaid interest balance as of September 30, 2009 and December 31, 2008 was
$111,718 (unaudited) and $24,963 (unaudited), respectively.

In conjunction with the loan agreement noted above, MMR was required to maintain certain financial covenants, including the
requirement that MMR have at least $100,000 in cash in its bank accounts or such other amount as necessary to maintain operations
through the subsequent thirty (30) days and timely pay any obligations due respecting payroll and all associated payroll taxes on and after June 1, 2009.

On August 18, 2009, the Company and The RHL Group entered into a Waiver Agreement,
pursuant to which, in consideration of The RHL Group's waiver of MMR's payment default under the Third Amended
Note, the Company granted to The RHL Group a warrant to purchase an aggregate of 11,039,378 shares of the
Company's common stock, with an exercise price equal to $0.13 per share, the closing price of the Company's common
stock on the date immediately preceding the date of grant. Under the Waiver Agreement, The RHL Group agreed to
waive MMR's payment default until August 31, 2009, which waiver period will automatically continue until The RHL
Group notifies MMR otherwise. In addition, as repayment of the unpaid origination fee owed to The RHL Group by MMR
in connection with the credit line restructuring, the Company granted to The RHL Group 2,800,000 shares of common
stock.

As of September 30, 2009, MMR was in compliance with its financial covenants under the terms of the Third Amended
Note.

NOTE 4 - PREPAID EXENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets include the following:


September 30,


December 31,2009


2008(unaudited)Prepaid consulting fees

$
410,667

$
-Prepaid insurance


231,755


41,183Prepaid rent


14,697


-Prepaid other


18,345


12,121Total Prepaid Expenses and Other Current Assets

$
675,464

$
53,304NOTE 5 - INCOME TAXESUnder ASC 740-270 (formerly Accounting Principles Board Opinion No. 28, "Interim Financial Reporting"), the Company
is required to adjust its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. The Company is also
required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation
allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected
loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate.
The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing
of actual earnings versus annual projections.
MMR, in its capacity as the operating company taking over MMRIS's income tax positions in addition to its own positions after January
27, 2009 (see Note 1), has estimated its annual effective tax rate to be zero. This is based on an expectation that the combined entity will
generate net operating losses in 2009, and it is not more likely than not that those losses will be recovered using future taxable income.
Therefore, no provision for income tax has been recorded as of and for the nine months ended September 30, 2009.

14NOTE 6 - COMMITMENTS AND CONTINGENCIES
Leases
The Company leases certain facilities and equipment under non-cancelable capital and operating leases, which expire at various
dates through 2011. Total rent expense for the three months ended September 30, 2009 and 2008 was $18,400 (unaudited) and $92,969
(unaudited), respectively. Total rent expense for the nine months ended September 30, 2009 and 2008 was $40,300 (unaudited) and
$170,335 (unaudited), respectively. Future minimum lease payments as of September, 2009, under non-cancelable operating leases (with
initial or remaining lease terms in excess of one year) and future minimum capital lease payments are as follows:

Year Ended


Operating


CapitalDecember 31,


Leases


Leases2009 (remainder of)

$
12,267

$
4,8752010


-


8,9592011


-


8,959Total minimum lease payments

$
12,267


22,792Less interest portion





(2,207)$
20,585The amount shown under "Operating Leases" above includes the Company's obligation under a long term
lease for office space. In August 2008, MMR vacated this space prior to the end of the lease term. In February 2009, the Company and the
landlord approved a settlement agreement. The Company accrued for the amount of the settlement liability as of December 31, 2008, which
amounted to $62,500 and is reflected in accounts payable and accrued expenses in the accompanying consolidated balance sheet. There is
no remaining balance of the settlement liability as of September 30, 2009.
In April 2009, the Company renewed its lease with its Chairman and Chief Executive Officer on a month-to-month basis for use of office
space for a total of $3,000 per month. The Company terminated this lease in May 2009.
Effective May 1, 2009, the Company entered into a lease agreement to lease additional office space in Beverly Hills, California. The
lease is month-to-month and requires a monthly payment of $6,133 commencing in June 2009.

Guarantee provided by The RHL Group
Under the terms of an agreement with an investor who purchased $500,000 of MMR's Series B Preferred shares in 2006, the
Company entered into an agreement to invest $250,000 in a joint venture with the investor to establish an entity to market and sell the
Company's services in the countries of Japan, China, Korea, Taiwan and Thailand. The Company has paid $100,000 to date of this amount
which the Company has expensed during the 3 months ended June 30, 2009 as the Company has since terminated its relationship with the
investor. To date, no joint venture has been formalized or incorporated, and no operations have commenced and there are no employees.
In September 2007, The RHL Group,
provided the investor with a guarantee that the Company would meet its obligations under this agreement in exchange for 300,000 shares of
restricted MMR common stock valued at $39,000. As consideration for renewing the guarantee when it expired in September 2008, in
January 2009, MMR issued The RHL Group 100,000 shares of MMR common stock, which became 328,174 shares of MMRIS common
stock upon the closing of the Merger, valued at approximately $5,000 (unaudited). This expense has been reflected in general and
administrative expenses in the accompanying consolidated statement of operations for the nine months ended September 30, 2009. As a
result of the Company terminating this agreement, the Company is free to explore other business opportunities in the territory separate from
the investor specifically at this time in China and Japan.  The Company, at its option, may still involve the investor in these business
activities under a separate agreement.

15Employment Agreements
The Company has employment agreements with its Chairman, President and Chief Executive Officer, Robert H. Lorsch, and its
Chief Financial Officer and Senior Vice President, Naj Allana. Under each employment agreement, the executive officers receive a base
salary, subject to annual increases as determined by the board of directors, certain benefits as set forth in the employment agreements, and
an annual bonus at the discretion of the board of directors.
The current term of Mr. Lorsch's employment agreement is effective until December 31, 2011 and will automatically renew for
successive 12 month periods unless terminated at least 60 days prior to the end of the term. The employment agreement may be terminated
by the Company without cause (as defined in the agreement) upon 30 days written notice or for cause if Mr. Lorsch fails to cure the acts or
omissions constituting cause within 30 days. If Mr. Lorsch's employment is terminated by the Company for cause or voluntarily by Mr.
Lorsch without good reason, he will not be entitled to receive any severance payments or benefits under the employment agreement. If Mr.
Lorsch's employment is terminated by the Company without cause or voluntarily by Mr. Lorsch for good reason, Mr. Lorsch will be entitled to
one year of salary at his then current rate of pay, including all monthly benefits, and the pro rata portion of the annual bonus otherwise due
Mr. Lorsch.
Mr. Lorsch's employment agreement includes provisions that prohibit Mr. Lorsch from disclosing the Company's confidential information
and trade secrets and competing with the Company during the term of his employment agreement or soliciting the Company's employees for
18 months following termination of employment.
Mr. Allana's employment agreement is effective until February 15, 2010, and will automatically renew for successive 12 month periods
unless terminated at least 120 days prior to the end of the term. If the Company terminates Mr. Allana's employment, unless due to
misconduct (as defined in the employment agreement), the Company must continue to pay Mr. Allana his monthly salary for the remainder
of the then current term, or if done 120 days preceding the end of the term, then through the end of the next 12 month term.
Litigation Matters
From time to time, the Company is involved in various legal proceedings generally incidental to its business. While the result of any
litigation contains an element of uncertainty, management presently believes that the outcome of any known, pending or threatened legal
proceeding or claim, individually or combined, will not have a material adverse effect on the Company's financial statements.
NOTE 7 - STOCKHOLDERS' DEFICIT
Preferred Stock
As of December 31, 2008, there were 3,332,694; 1,263,750; and 1,580,082 shares of MMR's Series A, Series B and Series C
Preferred Stock, respectively, issued and outstanding. Immediately prior to the Merger, the outstanding MMR preferred stock was converted
to MMR common stock, representing an aggregate of 6,176,526 shares, which converted into MMRIS common stock in the Merger. As of
September 30, 2009 (unaudited), there were no shares of MMR preferred stock issued and outstanding.
The Company has 5,000,000 shares of MMRIS preferred stock authorized. As of September 30, 2009 (unaudited), there were no
shares of MMRIS preferred stock issued and outstanding.

16Common Stock
As of September 30, 2009, the Company was authorized to issue 650,000,000 shares of common stock. Immediately prior to the
Merger, there were 41,254,550 shares of MMRIS common stock issued and outstanding. On July 10, 2009, the stockholders of the
Company approved an increase to the shares of common stock it is authorized to issue. As of July 10, 2009, the Company was authorized
to issue 650,000,000 shares of common stock.
Pursuant to the Merger Agreement, MMRIS agreed to issue (or reserve for issuance) an aggregate 92,599,196 shares of MMRIS
common stock to the stockholders of MMR and the holders of options and warrants to acquire MMR common stock at the time of the
Merger.
Immediately prior to the Merger, and including the conversion of 6,176,526 shares of MMR preferred stock into MMR common stock, the
issuance of 100,000 shares of MMR common stock to The RHL Group for renewal of a guarantee (see Note 6), MMR had 24,320,100
shares of common stock issued and outstanding. At the effective time of the Merger, and in accordance with the terms of the Merger
Agreement, these shares of outstanding MMR common stock automatically converted into 79,812,087 shares of MMRIS common
stock.
On March 13, 2009, the Company approved the issuance of 1,202,587 shares of MMRIS common stock including 1,145,324 shares of
treasury stock, as replacement of options to acquire 1,202,587 shares of common stock. This resulted in an additional expense of $1,466
(unaudited) recorded during the nine months ended September 30, 2009.
On September 15, 2009, the Company entered into the Investment Agreement with Dutchess Equity Fund, L.P., or
"Dutchess". Pursuant to the Investment Agreement, Dutchess committed to purchase up to $8,000,000 of the Company's
common stock, over the course of 60 months. The aggregate number of shares issuable by the Company and purchasable by Dutchess
under the Investment Agreement is 100,000,000. The Company may draw on the facility from time to time, as and when the Company
determines it is appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum amount that the
Company is entitled to put in any one notice is the greater of (i) 200% of the average daily volume (U.S. market only) of the common stock
for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such
trading days or (ii) $150,000. The purchase price shall be set at ninety-four percent (94%) of the lowest closing best bid of the Company's
common stock during the pricing period.
In connection with the preparation of the Investment Agreement and the registration rights agreement, the Company was required to
pay Dutchess a document preparation fee in the amount of $15,000, which was partially paid in cash and for the remainder issued Dutchess
230,800 shares of common stock, which equaled $30,000 worth of common stock based on the closing sales price of our common stock on
August 13, 2009, the execution date of the non-binding term sheet with Dutchess. The document preparation fee is included in deferred
financing costs as of September 30, 2009 and will be recorded as a cost of capital when the Company first draws down on the facility. The
Company has filed the Form S-1 pursuant to the agreement but it is not yet effective. As of September 30, 2009, the Company has not
drawn down on the facility.
As of September 30, 2009, the total shares of the Company's common stock issued and outstanding amounted to 151,625,775
(unaudited).
Warrants for Purchase of Preferred B shares
On April 1, 2007, MMR granted 200,000 warrants to purchase Series B Preferred Stock of MMR at an exercise price of $2.00. The
warrants were issued to the largest distributor of employee assistance services in the US as an incentive to market and sell MMR's services
into their customer base. The related services agreement was for five years, and the customer never bought any services from MMR.
Upon closing of the Merger on January 27, 2009, these warrants converted into warrants to purchase 656,346 shares of MMRIS
common stock at an exercise price of $0.61 per share. There was no additional expense recorded during the nine months ended September
30, 2009 resulting from the modification of these warrants.

17NOTE 8 - EQUITY ISSUANCES
Stock Option Activity
A summary of option activity for the nine months ended September 30, 2009 (unaudited) is presented below. Options granted by
MMR prior to the date of the Merger of January 27, 2009 have been retroactively restated as of December 31, 2008 to reflect the conversion
ratio of MMR to MMRIS shares.


Weighted-AverageWeighted-

Remaining


AggregateAverage

Contractual


IntrinsicExercise

Life


ValueOptions


Price

(Years)Outstanding at December 31, 2008

13,862,228

$
0.47

1.76

$
-Granted

16,170,000

$
0.13Exercised

(6,050,782)

$
0.05Forfeited

(579,935)

$
3.55Cancelled

(2,600,227)

$
1.50Outstanding at September 30, 2009 (unaudited)

20,801,284

$
0.11

3.61

$
216,819Vested and expected to vestat September 30, 2009 (unaudited)

20,801,284

$
0.11

3.61

$
216,819Exercisable at September 30, 2009 (unaudited)

8,451,082

$
0.09

2.28

$
209,551The aggregate intrinsic value in the table above is before applicable income taxes and is calculated based on
the difference between the exercise price of the options and the quoted price of the common stock as of the reporting date.

A summary of the activity of the Company's nonvested options for the nine months ended September 30, 2009 (unaudited) is presented
below.

WeightedAverageGrant DateShares


Fair ValueNonvested at December 31, 2008


1,207,822

$
0.57Granted


16,170,000

$
0.10Vested


(4,826,531)

$
0.15Forfeited


(201,088)

$
2.28Nonvested at September 30, 2009 (unaudited)


12,350,203

$
0.10As of September 30, 2009, total unrecognized stock-based compensation expense related to nonvested stock
options was $1,216,572 (unaudited), which is expected to be recognized by the year ended December 31, 2011. Total stock option expense
recorded during the three months ended September 30, 2009 and 2008 amounted to $477,578 (unaudited) and $276 (unaudited),
respectively, and is reflected in operating expenses in the accompanying consolidated statements of operations. The total stock option
expense recorded during the nine months ended September 30, 2009 and 2008 amounted to $695,180 (unaudited) and $6,241 (unaudited),
respectively.

18The following table summarizes information about stock options outstanding and exercisable at September 30, 2009 (unaudited).

Options Outstanding

Options ExercisableWeighted


Weighted




WeightedAverage


Average




AverageExercise

Number

Remaining


Exercise

Number


ExercisePrice

of Shares

Life (Years)


Price

of Shares


Price$
0.05

4,800,014

0.61

$
0.05

4,635,922

$
0.050.06

131,270

0.10


0.06

131,270


0.060.18

1,570,000

4.64


0.18

283,890


0.180.13

14,300,000

4.53


0.13

3,400,000


0.1320,801,284






8,451,082WarrantsOn November 7, 2007, in conjunction with the registered direct offering of an aggregate of 7.4 million shares, the Company
issued warrants to purchase up to 4.4 million shares of the Company's common stock at an exercise price of $2.77 per share. The warrants
are exercisable as of the date of grant through November 7, 2012. The Company valued the warrants using a Black-Scholes pricing
model.  ASC 815-40 (formerly EITF 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock") requires freestanding contracts that are settled in a Company's own stock, including common stock
warrants to be designated as an equity instrument, asset or liability. A contract designated as an asset or a liability must be carried at fair
value until exercised or expired, with any changes in fair value recorded in the results of operations.  ASC 815-40 (formerly SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities") was applied to determine that the liability is accounted for
as a derivative (see annual report on Form 10-K for the year ended December 31, 2008, filed on April 15, 2009 for a more detailed
discussion). The valuation of these warrants amounted to $0 and $88,998 (unaudited) as of December 31, 2008 and September 30, 2009,
respectively. The increase in fair value of $88,998 was presented as change in valuation of warrants in the accompanying consolidated
statements of operations.
Immediately prior to the Merger, MMRIS issued warrants to acquire 9,999,992 shares of MMRIS's common stock at an exercise price of
$0.12 per share, which expire on January 26, 2014, to certain former officers, former directors and their affiliates who were willing to take
such equity as partial or full payment for outstanding liabilities. These warrants vested immediately and were valued on the date of grant
using the Black-Scholes option pricing model using the assumptions as described in Note 2. As this transaction occurred immediately prior
to the Merger, the resulting gain on the issuance of warrants was reflected in the statement of operations of MMRIS. There is no impact of
this transaction recorded on the accompanying consolidated statement of operations for the nine months ended September 30, 2009
(unaudited).
On March 1, 2009, the Company granted to a consultant 500,000 warrants to purchase shares of the Company's common stock at an
exercise price of $0.15 per share. The warrants vest over a six month period and have a contractual life of five years. These warrants were
valued using the Black-Scholes option pricing model using the assumptions as described in Note 2. As of September 1, 2009, the date
these warrants fully vested, the total value of these warrants amounted to $34,741 (unaudited), of which $34,741 (unaudited) was recorded
as stock based compensation expense during the nine months ended September 30, 2009. On March 1, 2009, the Company granted an
additional 1,250,000 warrants to this consultant with an exercise price of $0.15 per share, conditional upon the consultant being hired as full
time employee by November 1, 2009. If this condition is met, the warrants vest over a 30 month period and expire on November 1, 2014.
The Company has not recorded any expense for these warrants as of September 30, 2009, as their vesting was not assessed as
probable.

19On March 8, 2009, the Company granted to a group of consultants an aggregate total of 600,000 warrants to purchase shares of the
Company's common stock at an exercise price of $0.175 per share. Of the warrants granted, 100,000 vested immediately upon grant and
500,000 vest over a two year period. These warrants were valued using the Black-Scholes option pricing model using the assumptions as
described in Note 2. The total value of these warrants amounted to $42,502 (unaudited), of which $12,918 (unaudited) related to the
100,000 warrants which was recorded as a reduction of outstanding accounts payable during the nine months ended September 30, 2009
and $7,376 related to the 500,000 warrants which was recorded in sales and marketing expense for the nine months ended September 30,
2009.
On March 13, 2009, the Company granted to a group of vendors an aggregate total of 1,300,000 warrants to purchase shares of the
Company's common stock at an exercise price of $0.175 per share. These warrants all vested immediately. These warrants were valued
using the Black-Scholes option pricing model using the assumptions as described in Note 2. The total value of these warrants amounted to
$173,636 (unaudited), which was recorded as interest expense during the nine months ended September 30, 2009, as the Company
granted these warrants as consideration for the vendors agreeing to defer payment of their outstanding liabilities.
On April 6, 2009, the Company granted to a customer 50,000 warrants to purchase shares of the Company's common stock at an
exercise price of $0.23 per share. The warrants vested immediately. These warrants were valued using the Black-Scholes option pricing
model using the assumptions as described in Note 2. The total value of these warrants amounted to $8,490 (unaudited), all of which was
recorded as a reduction to subscriber revenues during the nine months ended September 30, 2009.
On May 13, 2009, the Company granted to a group of consultants an aggregate total of 275,000 warrants to purchase shares of the
Company's common stock at an exercise price of $0.19 per share. Of the warrants granted, 75,000 vested immediately upon grant and
200,000 vest over a six month period. These warrants were valued using the Black-Scholes option pricing model using the assumptions as
described in Note 2. As of September 30, 2009, the total value of these warrants amounted to $22,735 (unaudited), of which $19,971
(unaudited) was recorded as an operating expense during the nine months ended September 30, 2009.
On July 29, 2009, the Company elected to pay a $30,000 loan commitment fee through the issuance of warrants exercisable into
375,000 shares of the Company's common stock at an exercise price of $0.14 per share. The warrants vested immediately. These warrants
were valued using the Black-Scholes option pricing model using the assumptions as described in Note 2. The total value of these warrants
amounted to $32,399 (unaudited), all of which was recorded as a reduction to the commitment fee payable in July 2009, with a loss on
settlement of payables for $2,399.
On July 29, 2009, the Company granted to a consultant 304,826 warrants to purchase shares of the Company's common stock at an
exercise price of $0.125 per share. The warrants vested immediately. These warrants were valued using the Black-Scholes option pricing
model using the assumptions as described in Note 2. The total value of these warrants amounted to $29,481 (unaudited), all of which was
recorded as a reduction of outstanding accounts payable during the nine months ended September 30, 2009.
On August 11, 2009, the Company granted to a service provider 1,000,000 warrants to purchase shares of the Company's common
stock at an exercise price of $0.125 per share. These warrants all vested immediately. These warrants were used valued using the Black-
Scholes option pricing model using the assumptions as described in Note 2. The total value of these warrants amounted to $96,637
(unaudited), which was recorded as interest expense during the nine months ended September 30, 2009, as the Company granted these
warrants as consideration for the service provider agreeing to defer payment of their outstanding liabilities.
On August 17, 2009, the Company granted to Robert Lorsch and The RHL Group a total of 11,745,983 warrants to purchase shares of
the Company's common stock at an exercise price of $0.13 per share. These warrants all vested immediately. These warrants were used
valued using the Black-Scholes option pricing model using the assumptions as described in Note 2. The total value of these warrants
amounted to $1,131,852 (unaudited), which was recorded as interest expense during the nine months ended September 30, 2009, as the
Company granted these warrants as consideration for Robert Lorsch guarantying monies owed to a vendor and The RHL Group's waiver of
MMR's payment default under the Third Amended Note.

20On July 16, August 3, August 7, and September 15, 2009, the Company granted to five unrelated third-parties (the
"Holders") a total of 3,110,000 warrants to purchase shares of the Company's common stock in connection with the 12%
Convertible Promissory Note ("the Convertible Notes") at an exercise price equal to the lesser of (i) the product of 50% multiplied by the
arithmetic average of the dollar volume-weighted average price ("VWAP") of the common stock for the 10 consecutive trading
days ending on the day that is 3 Trading Days prior to the applicable exercise date or (ii) $0.15. The total value of these warrants amounted
to $240,832 (unaudited), which was bifurcated from the Convertible Notes and accounted for as a discount on debt. The discount is being
accreted over the initial term of the Convertible Notes using the interest method and upon exercise the entire unamortized discount is
recognized into additional paid in capital.  See "Convertible Promissory Notes" Note below.

The following summarizes the total warrants outstanding and exercisable as of September 30, 2009 (unaudited).

Warrants Outstanding

Warrants ExercisableWeighted

Weighted




WeightedAverage

Average




AverageExercise


Number

Remaining

Exercise

Number


ExercisePrice


of Shares

Life (Years)

Price

of Shares


Price$
0.05 - 0.61


28,142,147

4.54
$
0.14

26,486,668

$
0.141.80 - 2.77


4,459,910

3.11

2.77

4,459,910


2.773.98 - 6.33


3,371,787

1.51

5.14

3,371,787


5.1435,973,844


$
0.93

34,318,365

$
0.97The weighted average fair value of warrants granted during the nine months ended September 30, 2009
amounted to $0.10 (unaudited). There were 3,025,000 warrants exercised during the nine months ended September 30, 2009 (unaudited).
Of the total warrants exercised, 2,650,000 warrants were granted in connection with the Convertible Notes while the remaining 375,000
were granted in connection with the $30,000 loan commitment fee.
Restricted Stock Program
Under the Restricted Stock Program, a restricted stock award is an offer by the Company to sell to an eligible person shares that are
subject to restrictions relating to the sale or transfer of the shares. A committee appointed by the Board to administer the program or the
Board itself shall determine to whom an offer will be made, the number of shares the person may purchase, the price to be paid and the
restriction to which the shares shall be subject. The offer must be accepted by the eligible person within thirty days from the date of the offer
evidenced by the Restricted Stock Purchase Agreement. The purchase price of shares shall not be less than 85% of the fair market value of
such shares on the issue date, with the provision that the purchase price for a 10% stockholder shall not be less than 110% of such fair
market value. Shares are either fully and immediately vested upon issuance, or may vest in installments upon attainment of specified
performance objectives. There were no shares issued under the restricted stock program for the nine months ended September 30, 2009
(unaudited). During the nine months ended September 30, 2008, MMR issued 2,095,000 (unaudited) shares of restricted MMR common
stock for services and interest expense on the line of credit with The RHL Group. These shares of MMR became 6,875,226 (unaudited)
shares of MMRIS subsequent to the merger. The total value of these restricted shares amounted to $314,250, of which $104,250 is
recorded in general administrative expenses and $210,000 is recorded in interest and other expenses, net on the accompanying
consolidated statement of operations for the nine months ended September 30, 2008.

21Stock Bonus Program
Under the Stock Bonus Program, shares are issued as a bonus for past services rendered pursuant to the Stock Bonus Agreement.
Stock bonuses may be awarded upon satisfaction of specified performance goals pursuant to the Performance Stock Bonus Agreement. No
shares were issued under the Stock Bonus Program during the nine months ended September 30, 2009 or 2008 (unaudited).
Derivative Liabilities
In accordance with ASC 815-40 (formerly EITF 00-19, "Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock"), on January 27, 2009, the Company performed an analysis as if all holders of
options and warrants exercised their rights under those contracts. This analysis resulted in the conclusion that the Company had inadequate
authorized shares to settle 100% of these contracts. Therefore, as shareholder approval would be necessary to increase the number of
authorized shares, settlement of these obligations would not be within the control of the Company. Consequently certain non-employee
options and warrants were accounted for as derivative liabilities in accordance with ASC 815-40 (formerly SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities").
The event giving rise to this condition was the merger between Favrille, Inc. and MyMedicalRecords.com, Inc. on January 27, 2009. On
that date, the fair value of 3,436,458 vested non-employee options and 15,218,890 vested warrant contracts subject to this analysis was
reclassified from equity to derivative liabilities. The condition was remedied on June 13, 2009 when certain of the option and warrant holders
waived their rights under those contracts until such time that the Company had 250 million or more shares authorized. On March 31, 2009
and June 13, 2009, these contracts were again valued using the Black-Scholes option valuation model and the difference between the
original value at January 27, 2009 of $871,052 and the values at March 31, 2009 and June 13, 2009 of $2,665,889 and $1,377,033,
respectively, was recorded as a gain on change in value of derivatives for the three months ended June 30, 2009 and a loss on change in
value of derivatives for the six months ended June 30, 2009. On June 13, 2009, the derivative liabilities were reclassified back into equity
resulting in a gain of $1,288,856 for the three months ended June 30, 2009 and a loss of $505,981 for the six months ended June 30, 2009.
On July 16, 2009, the Company entered into a 12% Convertible Promissory Note with an unrelated third-party for a principal amount
totaling $30,000.  Subsequently, the Company entered into identical 12% Convertible Promissory Notes ("the Convertible Notes") with four
other unrelated third-parties for an additional $530,000. Each Convertible Note is convertible into shares of common stock by dividing (i) the
then outstanding balance of such note by (ii) the product of eighty percent (80%) multiplied by the arithmetic average of the volume
weighted average price ("VWAP") of the common stock for the ten (10) consecutive trading days ending on the day that is three
(3) trading days prior to the applicable conversion date.  In addition, the Company granted a total of 3,110,000 warrants to purchase shares
of the Company's common stock in connection with the Convertible Notes at an exercise price equal to the lesser of (i) the product of 50%
multiplied by the arithmetic VWAP of the common stock for the 10 consecutive trading days ending on the day that is 3 Trading Days prior to
the applicable exercise date or (ii) $0.15. Such arrangement resulted in the possibility that the Company may not have enough authorized
shares to settle these obligations using common stock. Instead, there is the possibility, although remote, that it might need to settle one or
more of these contracts with cash. Consequently certain non-employee options and warrants were accounted for as derivative liabilities as
of July 16, 2009.
The event giving rise to this condition was the first Convertible Note the Company entered into on July 16, 2009. As of July 16, 2009 and
for all subsequent options and warrants issued prior to September 30, 2009, the fair value of 2,421,789 vested non-employee options and
33,976,760 vested warrant contracts subject to this analysis was reclassified from equity to derivative liabilities. On September 30, 2009,
these contracts were again valued using the Black-Scholes option valuation model and the difference between the original value at July 16,
2009 of $2,657,576, including the cancellation of exercised warrants and options of $50,058 and the value at September 30, 2009 of
$1,702,587, was recorded as a gain on change in value of derivatives. The gain recorded related to this matter was $904,930 included in the
change in valuation of derivative liabilities for the three months ended September 30, 2009 of $979,309. Included within the $904,930 gain
was a $14,769 gain due to the derecognition of options and warrants exercised between July 16, 2009 and September 30, 2009.

22None of the derivatives liabilities were designated as hedging instruments.

The inputs used for the Black-Scholes option valuation model were as follows:

January 27, 2009

March 31, 2009

June 13, 2009

July 16, 2009

September 30, 2009Expected life in years

0.25 - 5.0 yrs

0.07 - 5.59 yrs

0.13 - 5.4 yrs

0.13 - 4.83 yrs

0.00 - 4.83 yrsStock price volatility

102.42% - 183.93%

103.45% - 178.61%

104.54% - 152.74%

104.67% - 152.29%

94.68% - 147.10%Risk free interest rate

0.13% - 1.59%

0.17% - 1.67%

0.19% - 2.81%

0.19% - 2.46%

0.06% - 2.31%Expected dividends

None

None

None

None

NoneForfeiture rate

0%

0%

0%

0%

0%NOTE 9 - NOTES PAYABLE

Notes payable consisted of the following:

|                                                                                                                                                                                                                                     |  |   | September 30, |  |   | December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | ------------- |  | - | ------------
|                                                                                                                                                                                                                                     |  |   | 2009          |  |   | 2008        
|                                                                                                                                                                                                                                     |  |   | (unaudited)   |  |   |             
|                                                                                                                                                                                                                                     |  |   |               |  |   |             
|                                                                                                                                                                                                                                     |  |   |               |  |   |             
|Promissory notes payable due to the former officers of MMRIS aspart of severance packages, due in full on August 31, 2009 with nostated interest                                                                                     |  | $ | 76,783        |  | $ | -           
|                                                                                                                                                                                                                                     |  |   |               |  |   |             
|Promissory notes payable due to the two remaining officers of
MMRIS pursuant to the Resignation and Post-Merger Employment
Arrangement, due in full on August 31, 2009 with no stated interest                                       |  |   | 25,444        |  |   |             
|                                                                                                                                                                                                                                     |  |   |               |  |   |             
|Promissory notes payable due to vendors relating to settlement of
certain outstanding accounts payable, payable in 18 equal monthly
installments commencing on July 27, 2009 and ending on January 27, 2011,
with no stated interest |  |   | 223,116       |  |   | -           
|                                                                                                                                                                                                                                     |  |   |               |  |   |             
|Promissory notes payable due to PM Creative Corporation, due in full
on July 30, 2011, with a 12% per annum stated interest.                                                                                                         |  |   | 125,000       |  |   | -           
|                                                                                                                                                                                                                                     |  |   | 450,343       |  |   | -           
|Less: current portion                                                                                                                                                                                                                |  |   | 288,157       |  |   | -           
|Notes payable, less current portion                                                                                                                                                                                                  |  | $ | 162,186       |  | $ | -           

23

---

Future maturities with respect to these notes payable as of September 30, 2009 were as follows:

Year EndedDecember 31,2009 (remainder of)
$
188,9942010

136,3492011

125,000Total
$
450,343NOTE 10 - CONVERTIBLE PROMISSORY NOTES
On various dates during the quarter ended September 30, 2009 we issued Convertible Promissory Notes ("Notes") with
accredited investors for an aggregate of $560,000 principal amount. The Notes pay interest at a stated rate of twelve percent (12%) per
annum.
The Notes are convertible at the option of the holders into Common Stock at a variable conversion price of eighty percent (80%)
multiplied by the arithmetic average of the volume-weighted average trading price of the Common Stock for the ten (10) consecutive trading
days ending on the day that is three (3) trading days prior to the applicable conversion date, subject to anti-dilution and other customary
adjustments.
In connection with the Notes, we also issued warrants to purchase an aggregate of 3,110,000 shares of our Common Stock. The term of
the warrants is five years and the exercise price is the lesser of (i) the product of fifty percent (50%) multiplied by the arithmetic average of
the volume-weighted average trading price of the Common Stock for the ten (10) consecutive trading days ending on the day that is three
(3) trading days prior to the applicable exercise date, or (ii) $0.15, subject to anti-dilution and other customary adjustments.
Under the terms of the agreements, principal amounts owed under the Notes become due and payable December 31, 2009, provided
that, upon ten (10) days' prior written notice to the Holder, the Company may, in its sole discretion, extend the maturity date to June 30,
2010.
By virtue of the Notes' variable conversion ratio, a possibility exists, although remote, that the Notes may be convertible into shares of
Common Stock that exceed the currently authorized limit. Consequently, a possibility exists that the Company might be placed in a position
of net settling the Notes for an amount that exceeds their face value. This resulted in the conversion feature being a derivative under
Accounting Standards Codification ("ASC") 815-10 "Derivatives and Hedging."
Additionally, as a result of the above, all outstanding options and warrants issued to non-employees, including the warrants issued in
connection with the Notes, are also derivatives as they too could require net settlement in the absence of adequate authorized shares.
The fair value of the conversion feature of the Notes and related warrants was derived using the Black-Scholes option valuation model,
resulting in an aggregate fair value of $418,337. This amount was deducted from the Notes, resulting in an initial value ascribed to the Notes
of $141,663. The initial value of the Notes is being accreted to their face value over the initial term of the Notes using the interest method.
Upon conversion, the entire unamortized discount from the face value of the Notes is recognized as interest expense.


24The following table summarizes the Convertible Promissory Notes and discounts upon issuance:

Convertible Promissory Notes at face value

$
560,000Conversion feature derivative discount


(177,504)Warrant derivative discount


(240,832)Initial value of Notes

$
141,664On September 15, 2009, the same day these particular Notes were issued, two of the Note holders converted
their Notes, in the aggregate face amount of $400,000, into 5,555,556 shares of Common Stock. On that date the entire conversion feature
and warrant discounts on these Notes of $276,424 was recognized as interest expense. The following table shows activity in the Notes
account during the quarter ended September 30, 2009.

Initial value of Notes

$
141,664Conversion to common stock


(400,000)Accretion of converted Notes


276,424Accretion of un-converted Notes


58,225Value of Notes at September 30, 2009

$
76,313NOTE 11 - RESTRUCTURING ACTIVITIES

From May 29, 2008 to November 7, 2008, MMRIS had provided notices under the federal Worker Adjustment and Retraining
Notification Act to 142 employees, including six members of senior management, that it planned to conduct a workforce reduction at its
facility in San Diego, California and that their employment was expected to end on various dates between June 6, 2008 to November
7, 2008. Immediately prior to the date of the Merger on January 27, 2009, the total severance liability relating to former MMRIS employees
amounted to $1,682,416 (unaudited). On January 27, 2009, immediately prior to the Merger, as part of the 9,999,992 (unaudited) warrants
issued to creditors (see Note 8), the Company issued warrants as settlement of $985,020 (unaudited) of these amounts. In addition, the
Company signed promissory notes with certain former executives totaling $76,783 (unaudited), which notes are payable in full on August 31,
2009 (see Note 9).

As of September 30, 2009, the total remaining severance liabilities amounted to $620,613 (unaudited), which is reflected as severance
liability on the accompanying consolidated balance sheets. This consists of $571,362 payable to former non-executive employees in 18
monthly installments starting on July 27, 2009, as well as $49,251 in estimated payroll tax. No payments were made during the three
months ended September 30, 2009 on these severance liabilities.

During the period from January 27, 2009 through June 30, 2009, the Company entered into a series of settlement agreements with
certain vendors of MMRIS pursuant to the Creditor Plan, in which the Company settled approximately $302,982 (unaudited) of its
outstanding accounts payable for an aggregate settlement amount of $214,402 (unaudited), including promissory notes of $139,355
(unaudited) payable in 18 monthly installments starting on July 27, 2009 (see Note 9). This resulted in a gain of $0 (unaudited) and $89,170
(unaudited), which has been recorded as a gain on settlement of payables in the accompanying consolidated statements of operations for
the three and nine months ended September 30, 2009, respectively.

25

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NOTE 12 - RELATED PARTY TRANSACTIONS

The Company incurred $42,500 (unaudited) and $38,525 (unaudited) during the nine months ended September 30, 2009 and
2008, respectively, towards marketing consulting services from Bernard Stolar, a director. Included in related party payables at September
30, 2009 and December 31, 2008 was $85,848 (unaudited) and $76,025, respectively, with respect to these services. In addition, on August
6, 2009, the Company granted the Mr. Stolar 1,200,000 options to purchase common stock in the company at an exercise price of $0.125
per share in consideration for consulting and other services. The options vest in eight quarterly installments beginning on the grant
date.

The Company also incurred $37,500 (unaudited) during each of the nine months ended September 30, 2009 and 2008, respectively,
towards marketing consulting services from Hector Barreto, a director. Included in related party payables at September 30, 2009 and
December 31, 2008 was $0 (unaudited) and $75,000, respectively, with respect to these services. In the first quarter of 2009, the Company
entered into an agreement with The Latino Coalition, a non-profit organization in which Mr. Barreto is also the Chairman, to market the
Company's product to its members.  As of September 30, 2009, the Company has paid The Latino Coalition $4,000 as part of the
agreement. In addition, on August 6, 2009, the Company granted Mr. Barreto 1,200,000 options to purchase common stock in the company
at an exercise price of $0.125 per share in consideration for consulting and other services. The options vest in eight quarterly installments
beginning on the grant date.

In August 2006, the Company entered into a month-to-month lease with The RHL Group for the use of furniture and art for the
Company's offices, for a total of $1,000 per month which terminated on August 15, 2008. The Company incurred expenses of $0 (unaudited)
and $7,500 (unaudited) during the nine months ended September 30, 2009 and 2008, respectively.

In August 2008, the Company entered into an eight month lease with its Chairman and Chief Executive Officer for the use of office
space for a total of $3,000 per month plus a share of utilities. This lease was renewed in April 2009 on a month-to-month basis and
terminated in May 2009.

In February 2006, the Company entered into a letter agreement with MyMedicalRecords.com.au ("MMR AU") granting it a 10 year
exclusive right to market and sell the Company's products and services in Australia and New Zealand. The controlling shareholder of MMR
AU was, at the time of the signing of the initial letter agreement, a shareholder of the Company. This letter agreement was subsequently
formalized in the form of a ten year license agreement in October 2007, at which time the controlling shareholder of MMR AU was no longer
a shareholder of the Company. The Company terminated the license agreement on September 30, 2009.

The Company received $50,000 from MMR AU upon the signing of the letter agreement in February 2006 towards set up costs of the
platform to be used by customers of MMR AU. The Company completed the setup of the platform for MMR AU in 2007, at which time it
started to recognize this amount into revenue. The Company also received $150,000 in 2007 from MMR AU towards the minimum
guarantee payment for years 2 and 3 of the license term. This amount has been deferred and is being recognized as income based on the
number of months elapsed. On September 30, 2009 the license agreement was terminated and the balance remaining in deferred revenue
of $32,082 was recognized as license fee revenue. During the three months ended September 30, 2009 and 2008, the Company amortized
$33,332 (unaudited) and $20,000 (unaudited), respectively, of these amounts as license fee and other revenues in the accompanying
statement of operations. During the nine months ended September 30, 2009 and 2008, the Company amortized $48,332 (unaudited) and
$60,000 (unaudited), respectively, of these amounts as license fee and other revenues in the accompanying statement of operations. The
Company has accounted for this transaction under ASC 605-025 (formerly EITF 00-21, "Revenue Arrangements with Multiple
Deliverables").

26

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NOTE 13 - SUBSEQUENT EVENTS

In May 2009, the FASB issued additional guidance related to ASC Topic No. 855, "Subsequent Events" (ASC
855).  ASC 855 establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before
financial statements are issued.  The new guidance sets forth the period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for potential recognition in the financial statements, identifies the
circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial
statements, and the disclosures that should be made about events or transactions that occur after the balance sheet date. In preparing
these financial statements, the Company evaluated the events and transactions that occurred between September 30, 2009 through
November 16, 2009, the date these financial statements were issued.

On November 5, 2009, the Company entered into a 12% Convertible Promissory Note with an unrelated third-party for a principal
amount totaling $100,000. The 12% Convertible Promissory Note matures on July 31 2010, and the Company may, in its sole discretion,
extend the maturity date to December 31, 2010. The 12% Convertible Promissory Note bears an interest of 12% per annum payable in cash
or shares of common stock, or a combination of cash and shares of common stock. The decision whether to pay in cash, shares of common
stock or combination of both shall be at the sole discretion of the Company. The 12% Convertible Promissory Note is convertible into shares
of common stock by dividing (i) the then outstanding balance of such note by (ii) the product of eighty percent (80%) multiplied by the
arithmetic average of the volume weighted average price of the common stock for the ten (10) consecutive trading days ending on the day
that is three (3) trading days prior to the applicable conversion date.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our financial
statements and related notes appearing elsewhere in this quarterly report on Form 10-Q and the description of our business appearing in
our annual report on Form 10-K for the year ended December 31, 2008 filed with the SEC on April 15, 2009 (the "Form 10-K
"). This discussion contains forward-looking statements, the accuracy of which involves risks and uncertainties. See "Cautionary Note
Regarding Forward-Looking Statements" below. Our actual results could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by us described in "Risk Factors" in Item 1A of the Form 10-K and in the Company's
current report on Form 8-K/A filed on May 4, 2009.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and is subject to the safe harbor provisions created by that statute. The words "anticipate,"
"expect," "believe," "plan," "intend," "will" and similar expressions are intended to identify such statements. Although the forward-looking
statements in this quarterly report on Form 10-Q reflect the good faith judgment of our management, such statements are subject to various
risks and uncertainties, including but not limited to:

- The possible invalidity of the underlying assumptions and estimates;
- Possible changes or developments in economic, business, industry, market, legal and regulatory circumstances;
- Conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors
and legislative, judicial and other governmental authorities and officials;
- The ability to generate subscribers for our products and services; and
- Our ability to adapt our products to conform to any technical specifications necessary to benefit from stimulus package funding
- Our ability to raise capital in order to meet our financial obligations and invest in our business to grow revenues;
- Our ability to launch new products;

27

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- Managing costs while building up an effective sales and service delivery organization for our products; and
- Our ability to enter into marketing arrangements with large membership and affinity organizations for our products and maintain and
grow subscribers from such arrangements, such as those noted above, particularly after the initial introductory period.

Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our
control. Any of such assumptions could be inaccurate. You should not place undue reliance on these forward-looking statements, which are
based on our current views and assumptions. In evaluating these statements, you should specifically consider various factors, including the
foregoing risks and those outlined under "Risk Factors" in Item 1A of the Form 10-K and in the Company's current report on Form 8-K/A filed
on May 4, 2009. Our forward-looking statements represent estimates and assumptions only as of the date of this quarterly report on
Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or
circumstances occurring after the date of this quarterly report on Form 10-Q.

Overview

Background and Basis of Presentation

On January 27, 2009, we consummated a business combination with MMR through a merger of our wholly-owned subsidiary
with and into MMR pursuant to the terms of the Merger Agreement. In connection with the Merger, MMR became our wholly-owned
subsidiary, with the former stockholders of MMR collectively owning (or having the right to acquire) shares of our common stock
representing approximately 60.3% of the voting power of our capital stock on a fully diluted basis.

For accounting purposes, the Merger was treated as a reverse acquisition with MMR being the accounting acquirer. Accordingly, the
historical financial results prior to the Merger are those of MMR and replace our historical financial results as we existed prior to the Merger.
Our results of operations are included in MMR's financial results beginning on January 27, 2009.

MMR was incorporated in Delaware in 2005 and is headquartered in Los Angeles, CA. We provide users easy and ready access
to medical records and other vital documents through our principal product, the MyMedicalRecords PHR, an easy-to-use, secure web-based
personal health record system.

Source of Revenues

Our revenues are derived from the provision of services, which are comprised of facilitating electronic access to consumer medical
records and other vital documents, as well as international licensing of our services. We offer our services to subscribers either on a direct
subscription basis or an "access" basis through various types of organizations, and in both cases, we record these revenues under
"Subscriber" in our income statement. On a direct subscription basis, which we use when we market our products direct to consumers or
wholesale through corporations to their employees, or through affinity and membership organizations to their members, the subscriber pays
us directly with a credit card or Paypal account either on a monthly or annual plan. On an access basis, which we currently use only with
corporations, affinity and membership organizations, hospitals and other business to business customers, we charge a monthly fee to the
organization based on the number of users who will have access to our services through such organization, whether or not such users
actually enroll. Revenues from subscriptions accounted for 59.4% and 58.7% of our total revenues during the nine months ended
September 30, 2009 and 2008, respectively. Revenues from subscriptions accounted for 60.8% and 46.3% of our total revenues during the
three months ended September 30, 2009 and 2008, respectively.

28

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We also have generated revenues from licensing the sale and marketing of our services internationally and, to a lesser extent, from
ancillary fee payments. We record these licensing and other ancillary revenues under "License and Other Fees" in our income statement.
When we enter into a licensing arrangement, we are sometimes paid an upfront license fee and typically receive ongoing royalty payments
that are often based on a percentage of revenue earned by our licensee. These fees are recognized over the license period. When we
receive ancillary one-time payments, we record them when services or products are delivered. Revenues from licensing and other fees
accounted for 40.6% and 41.3% of our total revenues during the nine months ended September 30, 2009 and 2008, respectively. Revenues
from licensing and other fees accounted for 39.2% and 53.7% of our total revenues during the three months ended September 30, 2009 and
2008, respectively.

We recently began a beta launch of the MMRPro System which we plan on selling and or leasing direct to
physicians, health care providers and veterinarians.
With the introduction of MMRPro we are positioned to benefit from
government stimulus in the US and other countries around the world.  Additionally, the MMRPro system is designed to
generate additional Personal Health Record subscribers as well as revenue from EPrescribe and other physician order
entry products.  We are working with Kodak Corporation to market our Pro Services pursuant to a Software As A Service
vendor with Kodak's Capture Pro. We also provide services on a Private Label basis similar to our Alexian Brothers
Hospital product for the Alexian Brothers Hospital System and our Medic Alert Gold product sold by MedicAlert both
powered by MyMedicalRecords.com.

Cost of Revenue

Our cost of revenue includes the cost of maintaining our voice and fax mailboxes, long-distance call transport costs, fax and voice
call processing costs, credit card transaction processing costs, web hosting and management fees, website maintenance and support costs,
and costs associated with creating and mailing enrollment packages to our subscribers. Cost of revenue also includes customer service
costs. We also charge to cost of revenue our direct selling costs, which include commissions paid to sales representatives who sell our
wholesale and access based accounts.

Operating Expenses

The largest component of our operating expenses are our general and administrative expenses, which include personnel salaries
and benefits, office rent and supplies, insurance costs, fees for legal and professional services, as well as our expenses for corporate
telecommunications and internet access not associated with our products. Our operating expenses also include sales and marketing
expenses (which include expenses associated with attending trade shows and travel costs, as well as a portion of personnel salaries
allocated to sales and marketing activities), as well as technology development expenses (which includes expenses related to research and
development as well as a portion of personnel salaries allocated to development activities).

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the
financial statements. Critical accounting estimates and assumptions are those that may be material due to the levels of subjectivity and
judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact
on financial condition or operating performance. We base our estimates and judgments on our experience and on various other factors that
we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or
conditions. We believe the following critical accounting policies used in the preparation of our financial statements require significant
judgments and estimates. For additional information relating to these and other accounting policies, see note 2 to our consolidated financial
statements appearing elsewhere in this quarterly report on Form 10-Q.

Revenue Recognition

In general, we recognize revenue for the provision of such services only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed and the collectability of the resulting receivable is reasonably assured.

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We follow the provisions of Staff Accounting Bulletin ("SAB") No. 104,"Revenue Recognition in Financial Statements"
("SAB 104") and accordingly, we recognize annual recurring subscription fees paid in advance on a straight line basis over the
subscription period. In addition, we follow the provisions FASB ASC 605-025 (formerly EITF 00-21, "Revenue Arrangements with Multiple
Deliverables") and accordingly, we defer recognition of upfront fees paid under our licensing agreement and recognize them over the
period covered by the licensing agreement, and similarly, we defer recognition of minimum guaranteed royalty fees paid in advance under
our licensing agreement and recognize them in the period to which they relate.

Accounting for Income Taxes and Uncertain Tax Positions

Deferred income taxes result primarily from temporary differences between financial and tax reporting. Deferred tax assets and
liabilities are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted
tax rates. Future tax benefits are subject to a valuation allowance when management is unable to conclude that deferred tax assets will
more likely than not be realized from the results of operations. At each of the financial statement dates presented, we recorded a full
valuation allowance against deferred income taxes due to our limited operating history and net losses recorded since inception. Our
estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about
projected future operating results. If actual results differ from these projections or if management's expectations of future results change, it
may be necessary to adjust the valuation allowance.

We have generated losses for federal and state income tax reporting since inception. These tax losses are available for carryforward
until their expiration. In addition to potential expiration, there are other factors that could limit our ability to use our federal and state tax loss
carryforwards. For example, use of prior net operating loss carryforwards can be limited after an ownership change, such as the Merger.
Accordingly, it is not certain how much of our existing net operating loss carryforwards will be available for use. In addition, we must
generate taxable income in the future in order to use net operating loss carryforwards that have not expired. We are in the process of
evaluating the effects of the Merger and change in control of our company under Internal Revenue Code Section 382, which may limit the
availability of our net operating loss carryfowards.

Effective January 1, 2007, we began to measure and record uncertain tax positions in accordance with new guidance, which
prescribes a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. Only tax positions meeting the more- likely-than-not recognition threshold at the effective date may be recognized or continue to be
recognized upon adoption of this Interpretation.  The new guidance also provides guidance on accounting for derecognition, interest and
penalties, and classification and disclosure of matters related to uncertainty in income taxes. Accounting for uncertainties in income tax
positions involves significant judgments by management.

Intangible Assets

We account for website development costs in accordance with ASC 350-50 (formerly EITF 00-2, "Accounting for Website
Development Costs") and ASC 985-20 (formerly SFAS No. 86 "Accounting for the Costs of Computer Software to Be
Sold, Leased, or Otherwise Marketed"). Pursuant to ASC 350-50 and 985-20, the Company capitalizes internally developed
website costs when the website under development has reached technological feasibility. These costs are amortized, typically over an
estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio
between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance
sheet date, we evaluate the unamortized capitalized website costs compared to the net realizable value. The amount by which the
unamortized capitalized website costs exceed its net realizable value is written off. The determination of estimated future gross revenues
requires the exercise of judgment and assumptions by our management and actual results could vary significantly from such estimates.

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Impairment of Long-Lived Assets and Intangibles

We evaluate long-lived assets and identifiable intangible assets with finite useful lives in accordance with ASC 350-30 and ASC 360
(formerly SFAS No. 144 "Accounting for the Impairment or Disposal of Long-LivedAssets"), and accordingly, management reviews
our long-lived assets and identifiable intangible assets with finite useful lives for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable. We recognize an impairment loss when the sum of the future
undiscounted net cash flows expected to be realized from the asset is less than its carrying amount. If an asset is considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Considerable
judgment is necessary to estimate the fair value of the assets and accordingly, actual results could vary significantly from such estimates.
Our most significant estimates and judgments relating to the long-lived asset impairments include the timing and amount of projected future
cash flows.

Share-Based Compensation

We recognize compensation expense in accordance with ASC 718-20 (formerly SFAS No. 123(R), "Share Based
Payments"). Accordingly, we recognize share-based compensation in an amount equal to the estimated fair value of stock-based
awards and issuances, such as stock options granted to employees and non-employees and restricted stock awards. This estimation of the
fair value of each stock-based grant or issuance on the date of grant involves numerous assumptions by management. Although we
calculate the fair value of each stock option under the Black Scholes option pricing model, which is a standard option pricing model, this
model still requires the use of numerous assumptions. Assumptions used in this model include, among others, the expected life (turnover),
volatility of the underlying equity security, and expected dividends. The model and assumptions also attempt to account for changing
employee behavior as the stock price changes and capture the observed pattern of increasing rates of exercise as the stock price increases.
Further, because there is no public market for MMR's shares, the expected volatility is based on ranges for similar companies. The use of
different public company comparables in our assumptions and other assumptions by management in the Black Scholes option pricing model
could produce substantially different results.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see note 2 to our consolidated financial statements appearing
elsewhere in this quarterly report on Form 10-Q.

Internal Control over Financial Reporting

In connection with the audit for the years ended December 31, 2008 and 2007, our independent registered public accounting firm
identified significant deficiencies in our internal control over financial reporting that were considered to be material weaknesses. These
included the following:

- Inadequate Financial Statement Close Process and Cut-Off

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- Lack of Financial Expertise and Accounting Staff

- Lack of Supporting Documentation and Schedules

- Inadequate Journal Entry Review Process

In addition to the above, during the nine months ended September 30, 2009, our independent registered public accounting firm
identified additional material weaknesses regarding our inadequate approval process and documentation of equity grants because we did
not formally document all equity related grants and formally approve them in Board meetings or formally document revenue arrangements
with third parties. In addition, we did not properly accrue for all outstanding invoices as of September 30, 2009. To remedy these material
weaknesses, we have hired outside SoX consultants and the SoX consultants are in the process of better documenting our internal control
policies and procedures. We expect improvement in this area as we formalize our internal control policies and procedures.

Factors Affecting Future Results

In the first quarter of 2009, we entered into an agreement with The Latino Coalition, a non-profit organization with 600,000
business members nationwide, to market our product to its members (either on a direct to consumer basis or as an added benefit that its
members can offer their employees), and with the United Marketing Group, a leading direct marketer of affinity membership programs and
merchandise products, to market our products as a direct to consumer benefit.  Mr. Barreto, one of the members of Board of Directors, is the
Chairman of the Latino Coalition.  In June 2009, we took the necessary steps to file
for extensions of the Company's Patent Cooperation Treaty (PCT) patent application on anti-CD20 monoclonal antibodies to the national
phase through filings in major European, Asian, North American, and South American markets. The Company's anti-CD20 antibody asset is
potentially a candidate for the next generation Rituximab.

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In the third quarter of 2009, MMRIS entered into a sales, marketing and development agreement with Unis-Tonghe Technology Co
("Unis"), a business offering cloud computing services and document management services for the Ministry of Health in China,
which would result in the launch of our products within China early next year. During this same period we also entered into a into a five year
agreement  to license an existing 80 million person direct marketing database of street addresses, cellular phone numbers, e-mail
addresses and other comprehensive data with E-Mail Frequency, LLC. The agreement allows the Company to market, through the use of
the database, its MyMedicalRecords Personal Health Record, MyEsafeDepositBox virtual vault, and MMRPro document management
system to physicians and their patients.

We are continuing to work with Legal Zoom regarding the upcoming launch of its www.MyEsafeDepositBox as a
benefit to Legal Zoom clients.  We also anticipate that ESafeDeposit box represents a significant opportunity in the banking and
insurance markets worldwide.

Our future results will also be affected by the fact that we have incurred losses since inception and our ability to achieve profitability in
the near term is primarily dependent on our ability to invest capital in our business to increase revenues while controlling and limiting
expenses at a rate slower than revenue growth. Some of the current conditions and other factors that we expect could have a significant
impact on our future results are:

- Our ability to raise capital in order to meet our financial obligations and invest in our business to grow revenues;
- The pace of market adoption of our current and future products;
- Our ability to launch new products;
- Managing costs while building up an effective sales and service delivery organization for our products; and
- Our ability to enter into marketing arrangements with large membership and affinity organizations for our products and maintain and
grow subscribers from such arrangements, such as those noted above, particularly after the initial introductory period.

Results of Operations for the Three Months Ended September 30, 2009 as Compared to the Three Months Ended September
30, 2008

The following table sets forth items in our statements of operations for the periods indicated.

|                                              |  |  |   | Three Months Ended
|--------------------------------------------- |  |  | - | ------------------
|                                              |  |  |   | September 30,     
|                                              |  |  |   | 2009              
|                                              |  |  |   |                   
|Revenues                                      |  |  |   |                   
|Subscriber                                    |  |  | $ | 99,238            
|License fees and other                        |  |  |   | 64,033            
|Total revenues                                |  |  |   | 163,271           
|Cost of revenues                              |  |  |   | 108,609           
|Gross profit (loss)                           |  |  |   | 54,662            
|General and administrative expenses           |  |  |   | 1,228,951         
|Sales and marketing expenses                  |  |  |   | 364,928           
|Technology development                        |  |  |   | 45,750            
|Loss from operations                          |  |  |   | (1,584,967)       
|Gain on settlement of payables                |  |  |   | -                 
|Change in valuation of derivative liabilities |  |  |   | 979,309           
|Interest and other expenses, net              |  |  |   | (1,976,531)       
|Net loss                                      |  |  | $ | (2,582,189)       
|Deemed dividend                               |  |  |   | -                 
|Net loss available to common shareholders:    |  |  |   | (2,582,189)       

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Comparison of Three Months Ended September 30, 2009 to Three Months Ended September 30, 2008

Revenues.

Cost of revenue. Our cost of revenue increased by $20,341, from $88,268 for the three months ended September 30, 2008 to
$108,609 for the three months ended September 30, 2009. Cost of revenue increased in the third quarter of 2009 as compared to the third
quarter of 2008 primarily due to an increase of approximately $8,100 related to dedicated individual dial-up fax numbers required to
accommodate our additional subscribers and also to maintain an adequate inventory of numbers. The increase in cost of revenues was also
due to increase in website hosting and maintenance and sales commissions of $6,300 and $6,700, respectively. We had a gross profit and
positive gross margin of 33.5% for the third quarter of 2009 compared to a gross margin of 42.8% in the third quarter of 2008. The primary
reason for the decrease in our gross profit margin in the third quarter of 2009 was because our license fee revenues, which carry minimal to
no cost, decreased in comparison to the third quarter of 2008.

Operating expenses. The following table sets forth the individual components of our operating expenses for the three months
ended September 30, 2009 and 2008:

|                                    |  |  |   | Three Months Ended
|----------------------------------- |  |  | - | ------------------
|                                    |  |  |   | September 30,     
|                                    |  |  |   | 2009              
|                                    |  |  |   |                   
|General and administrative expenses |  |  | $ | 1,228,951         
|Sales and marketing expenses        |  |  |   | 364,928           
|Technology development              |  |  |   | 45,750            
|Total                               |  |  | $ | 1,639,629         

Operating expenses increased by $1,111,598 for the three months ended September 30, 2009 from $528,031
for the three months ended September 30, 2008. This significant increase is primarily due to the increase in our general and administrative
expenses, which increased 228.9% in large part because of increased legal and accounting fees of approximately $324,000 in 2009 as
compared to 2008 associated with the fees necessary to being a public company. A portion of the increase is due to increased share based
compensation expenses associated with stock option compensation, which increased by $260,000 compared to the third quarter of 2008, as
well as $215,000 in losses of stock settlement of liabilities. No common stock was issued to settle liabilities during the third quarter of 2008.
The increases in operating expenses were also driven by a 192.5% increase in sales and marketing expenses, primarily due to increased
share based compensation expenses associated with stock option compensation, which increased by $216,000 compared to the third
quarter of 2008. The increase in sales and marketing was also due to increased expenses associated with consultants hired to support our
growth in revenues and development, along with our existing employees spending a higher proportion of their time dealing with sales and
marketing related activities.

Change in valuation of derivative liabilities. In November 2007, Favrille issued warrants to purchase 4.4 million shares of
common stock in conjunction with a registered direct offering of common stock and warrants. We assumed these outstanding warrants as a
result of the Merger on January 27, 2009. The value associated with these warrants was recorded as a liability utilizing the Black-Scholes
valuation model. As of December 31, 2008, the warrants were valued at $0 and on June 30, 2009 and September 30, 2009 the warrants
were valued at $149,280 and $88,998, respectively. We recorded the change in valuation of $60,282 as a change in valuation of warrants
during the three months ended September 30, 2009. There was no such change in valuation during the three months ended September 30,
2008.

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Also, we had certain non-employee options and warrants outstanding which were accounted for as derivatives as there was a
possibility, although remote, that the Company may not have enough authorized shares to settle its 12% Convertible Promissory Note
obligations using common stock. The event giving rise to this condition was the first Convertible Note the Company entered into on July 16,
2009. As of July 16, 2009 and for all subsequent options and warrants issued prior to September 30, 2009, the fair value of the option and
warrant contracts subject to this analysis was reclassified from equity to derivative liabilities. On September 30, 2009, these contracts were
again valued using the Black-Scholes option valuation model and the difference between the original value at July 16, 2009 of $2,657,578,
the cancellation of exercised warrants and options of $50,058 and the value at September 30, 2009 of $1,702,587 was recorded as a gain
on change in value of derivatives. The gain recorded related to this matter was $904,930 included in the change in valuation of derivative
liabilities for the three months ended September 30, 2009. Included within the $904,930 gain was a $14,769 gain due to the derecognition of
options and warrants exercised between July 16, 2009 and September 30, 2009. There was no such change in valuation during the three
months ended September 30, 2008.

Interest and Other Expenses, Net. We had interest and other expenses, net of $1,976,531 for the three months ended
September 30, 2009, an increase of $1,934,118 from $42,413 for the three months ended September 30, 2008. The increase was primarily
as a result of common stock and warrants issued during the three months ended September 30, 2009 in exchange for the Company to
continue to defer payments to their debtors and consultants of $361,205, to The RHL Group for waiving MMR's payment default under the
Third Amended Note of $1,063,763 and to Robert H. Lorsch, the Company's Chairman, Chief Executive Officer and President in
consideration of a personal guaranty given to a vendor, to guarantee payments due to the vendor from the Company for services rendered
of $68,069. The increase was also driven by $334,650 of interest associated with the 12% Convertible Promissory Notes and attached
warrants entered into in July, August and September of 2009. There were no such arrangements during the three months ended September
30, 2008.

Net loss. As a result of the foregoing, we had a net loss of $2,582,189 for the three months ended September 30, 2009
compared to a net loss of $504,466 for the three months ended September 30, 2008.

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Results of Operations for the Nine Months Ended September 30, 2009 as Compared to the Nine Months Ended September 30,
2008

The following table sets forth items in our statements of operations for the periods indicated.

|                                              |  |  |   | Nine Months Ended
|--------------------------------------------- |  |  | - | -----------------
|                                              |  |  |   | September 30,    
|                                              |  |  |   | 2009             
|                                              |  |  |   |                  
|Revenues                                      |  |  |   |                  
|Subscriber                                    |  |  | $ | 279,705          
|License fees and other                        |  |  |   | 191,451          
|Total revenues                                |  |  |   | 471,156          
|Cost of revenues                              |  |  |   | 317,746          
|Gross profit (loss)                           |  |  |   | 153,410          
|General and administrative expenses           |  |  |   | 3,872,469        
|Sales and marketing expenses                  |  |  |   | 985,586          
|Technology development                        |  |  |   | 152,593          
|Loss from operations                          |  |  |   | (4,857,238)      
|Gain on settlement of payables                |  |  |   | 89,170           
|Change in valuation of derivative liabilities |  |  |   | 324,048          
|Interest and other expenses, net              |  |  |   | (2,335,615)      
|Net loss                                      |  |  | $ | (6,779,635)      
|Deemed dividend                               |  |  |   | -                
|Net loss available to common shareholders:    |  |  |   | (6,779,635)      

Comparison of Nine Months Ended September 30, 2009 to Nine Months Ended September 30, 2008

Revenues.

Cost of revenue. Our cost of revenue increased to $18,431 for the nine months ended September 30, 2009 from $299,315 for
nine months ended September 30, 2008. Cost of revenue increased by 6.2% in the nine months ended September 30, 2009 as
compared to2008, despite a 43.5% increase in revenues during the same time period, primarily due to a reduction in personnel. During the
nine months ended September 30, 2008, we had a full time employee performing website maintenance through April 30, 2008, resulting in
increased costs in 2008 of approximately $27,000. There were no such costs during the same period in 2009. These decreases in costs
during 2009 were offset by an increase in costs of approximately $31,000 related to dedicated individual dial-up fax numbers required to
accommodate our additional subscribers and maintain an adequate inventory of numbers. We had a gross profit and positive gross margin
of 32.6% for the nine months ended September 30, 2009 compared to a gross margin of 8.8% for the nine months ended September 30,
2008. The primary reasons for the improvement in our gross profit and margin during the nine months ended September 30, 2009 were
because our revenues increased sufficiently to cover the fixed cost components of our costs of revenue and there was an increase in
minimum guaranteed royalty payments with no corresponding cost increase.

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Operating expenses. The following table sets forth the individual components of our operating expenses for the nine months
ended September 30, 2009 and 2008:

|                                    |  |  |   | Nine Months Ended
|----------------------------------- |  |  | - | -----------------
|                                    |  |  |   | September 30,    
|                                    |  |  |   | 2009             
|                                    |  |  |   |                  
|General and administrative expenses |  |  | $ | 3,872,469        
|Sales and marketing expenses        |  |  |   | 985,586          
|Technology development              |  |  |   | 152,593          
|Total                               |  |  | $ | 5,010,648        

Operating expenses increased by $3,075,900 for the nine months ended September 30, 2009 from
$1,934,748 for the nine months ended September 30, 2008. This significant increase is primarily due to the increase in our general and
administrative expenses, which increased 258.2% in large part because of increased legal and accounting fees of approximately $1,800,000
in 2009 as compared to 2008 associated with the fees necessary to being a public company and the Merger which occurred on January 27,
2009. In addition, we had increased share based compensation expenses in 2009 of associated with stock option compensation and
expenses associated with the issuance of warrants to vendors as payment for services, as well as $221,841 in losses of stock settlement of
liabilities. No common stock was issued to settle liabilities during the same period in 2008.  In addition we had a $100,000 write-off of
advances due from a related party recorded during the second quarter of 2009 compared to no such write-off during the same period in
2008. We also incurred increased sales and marketing expenses, which increased by 33.5% in 2009 as compared to 2008, primarily due to
increased sales and marketing salaries associated with additional consultants hired to support our growth in revenues, stock option
compensation expense allocated to sales and marketing of approximately $216,000, along with our existing employees spending a higher
proportion of their time dealing with sales and marketing related activities. These increased sales and marketing expenses in 2009 were
offset by decreases in expenses resulting from the completion of the initial phase of setting up a sales program with a customer during the
first quarter of 2008. Our technology development expenses also increased by 32.4% in 2009 as compared to 2008 due to the hiring of a
consultant focused on development activities.

Gain on Settlement of Payables. During the nine months ended September 30, 2009, we had a gain on the settlement of
payables of $89,170 in connection with settlement agreements entered into with certain vendors relating to liabilities we assumed in
connection with the Merger. There was no such gain during the nine months ended September 30, 2008.

Change in valuation of derivative liabilities. In November 2007, Favrille issued warrants to purchase 4.4 million shares of
common stock in conjunction with a registered direct offering of common stock and warrants. We assumed these outstanding warrants as a
result of the Merger on January 27, 2009. The value associated with these warrants was recorded as a liability utilizing the Black-Scholes
valuation model. During the nine months ended September 30, 2009, the value of these warrants increased by $88,998. We recorded the
change in valuation as a change in valuation of warrants during the nine months ended September 30, 2009. There was no such
change in valuation during the nine months ended September 30, 2008.

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Also, we had certain non-employee options and warrants outstanding which were accounted for as derivatives as we had inadequate
authorized shares to settle 100% of these contracts. The event giving rise to this condition was the merger between Favrille, Inc. and
MyMedicalRecords.com, Inc. on January 27, 2009. On that date, the fair value of the option and warrant contracts subject to this analysis
was reclassified from equity to derivative liabilities. The condition was remedied on June 13, 2009 when certain of the option and warrant
holders indefinitely waived their rights under those contracts. On that date, the derivative liabilities were reclassified back into equity. On
June 13, 2009, these contracts were again valued using the Black-Scholes option valuation model and the difference between the original
value at January 27, 2009 of $871,052 and the value at June 13, 2009 of $1,377,033 was recorded as a loss on change in value of
derivatives for the six months ended June 30, 2009. The loss recorded for this matter was $505,981 for the six months ended June 30,
2009. There was no such change in valuation during the nine months ended September 30, 2008.

Also, we had certain non-employee options and warrants outstanding which were accounted for as derivatives as there was a
possibility, although remote, that the Company may not have enough authorized shares to settle its 12% Convertible Promissory Note
obligations using common stock. The event giving rise to this condition was the first Convertible Note the Company entered into on July 16,
2009. As of July 16, 2009 and for all subsequent options and warrants issued prior to September 30, 2009, the fair value of the option and
warrant contracts subject to this analysis was reclassified from equity to derivative liabilities. On September 30, 2009, these contracts were
again valued using the Black-Scholes option valuation model and the difference between the original value at July 16, 2009 of $2,657,578,
the cancellation of exercised warrants and options of $50,058 and the value at September 30, 2009 of $1,702,587 was recorded as a gain
on change in value of derivatives. The gain recorded related to this matter was $904,930 included in the change in valuation of derivative
liabilities for the nine months ended September 30, 2009. There was no such change in valuation during the nine months ended September
30, 2008.

Interest and Other Expenses, Net. We had interest and other expenses, net of $2,335,615 for the nine months ended September
30, 2009, an increase of $2,050,781 from $284,834 for the nine months ended September 30, 2008. The increase was primarily as a
result of common stock and warrants issued during the nine months ended September 30, 2009 in exchange for the Company to continue to
defer payments to their debtors and consultants of $564,252, to The RHL Group for waiving MMR's payment default under the Third
Amended Note of $1,063,763 and to Robert H. Lorsch, the Company's Chairman, Chief Executive Officer and President in consideration of
a personal guaranty given to a vendor, to guarantee payments due to the vendor from the Company for services rendered of $68,089.  The
increase was also driven by $334,650 of interest associated with the 12% Convertible Promissory Notes and attached warrants entered into
in July, August and September of 2009. There were no such arrangements during the nine months ended September 30, 2008. In addition,
there was $143,000 of amortization of The RHL Group loan origination fee during the nine months ended September 30, 2009 and no such
amortization during the same period in 2008. The increased expenses in 2009 were offset by expenses associated with common stock
issued as payment of interest expense on the line of credit of $210,000 during the nine months ended September 30, 2008.

Net loss. As a result of the foregoing, we had a net loss of $6,779,635 for the nine months ended September 30, 2009 compared
to a net loss of $2,190,591 for the nine months ended September 30, 2008.

Going Concern

As more fully described in note 1 to the consolidated financial statements appearing elsewhere in this quarterly report on Form
10-Q, our independent registered public accounting firm included an explanatory paragraph in their report on our 2008 financial statements
for the year ended December 31, 2008 related to the uncertainty of our ability to continue as a going concern. At September 30, 2009,
current liabilities of $7,527,425 exceeded cash and cash equivalents of $450,769.

Management's plan regarding this matter is to continue to utilize its available line of credit with The RHL Group. If the Company is
unable to utilize its available line of credit with The RHL Group, or obtain suitable alternative debt financing, it may adversely affect the
Company's ability to execute its business plan and continue as a going concern. For further details regarding our indebtedness with The
RHL Group, see "-Liquidity and Capital Resources- Description of Indebtedness-The RHL Group," below.

Additionally, the Company plans to sell additional equity securities, explore other debt financing arrangements and continue to increase
its existing customer base to obtain additional cash flow over the next twelve months. There can be no assurance that funds from these
sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If additional funds are raised
by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution
or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock.

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Liquidity and Capital Resources

We have incurred net losses of $6,779,635 and $2,190,591 for the nine months ended September 30, 2009 and 2008,
respectively. Historically, we have issued capital stock and received funds from The RHL Group to operate our business, and although we
expect to continue to receive financing from The RHL Group, we also expect to continue to incur losses from operations and need additional
sources of financing to fund our operations until we develop a profitable business. There can be no assurance that additional sources of
financing will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If additional funds are raised
by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution
or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock.

On September 15, 2009, the Company entered into an Investment Agreement with Dutchess Equity Fund, L.P., or
"Dutchess."  Pursuant to the Investment Agreement, Dutchess committed to purchase up to $8,000,000 of the Company's
common stock, over the course of 60 months.  The aggregate number of shares issuable by the Company and purchasable by Dutchess
under the Investment Agreement is 100,000,000.  MMRIS may draw on the facility from time to time, as and when the Company determines
it is appropriate in accordance with the terms and conditions of the Investment Agreement.  The maximum amount that MMRIS is entitled to
put in any one notice is the greater of (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading
days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii)
$150,000. The purchase price shall be set at ninety-four percent (94%) of the lowest closing best bid of the Company's common stock
during the pricing period. The Company has filed the Form S-1 pursuant to the agreement but it is not yet effective. As of September 30,
2009, the Company has not drawn down on the facility.

At September 30, 2009, we had $450,769 in cash and cash equivalents, and although we received approximately $1,050,000 in cash at
the closing of the Merger, and additional funding from The RHL Group pursuant to the Third Amended and Restated Note dated April 29,
2009, we nevertheless will still be required to obtain additional financing in order to meet the obligations for installment payments of
$853,000 under the Creditor Plan (including payments under the transition employment agreements of our former Chief Executive Officer
and former Chief Financial Officer) and our obligations under the subordinated secured indebtedness to The RHL Group (which note
payable had a balance of $1,678,071 at September 30, 2009; see Note 3 of our consolidated financial statements). For additional
information relating to the Creditor Plan see Exhibit 10.1 of our current report on Form 8-K filed on November 13, 2008, and for information
relating to The RHL Group see "- Related Party Transactions" below.

Cash Flows for the Nine Months Ended September 30, 2009 compared to Nine Months Ended September 30, 2008

Net cash used in operating activities for the nine months ended September 30, 2009 was $1,685,327. The reconciliation of net loss
of $6,779,635 to net cash used in operating activities for the nine months ended September 30, 2009 included non-cash charges of
$2,526,861 for share based compensation, $334,650 for interest on the 12% Convertible Promissory Notes, $221,841 for loss on stock
settlement of liabilities, $65,677 for depreciation and amortization, $100,000 for a write-off of advances due from a related party and
$142,857 for The RHL Group loan commitment fee amortization as well as increases of $1,744,042 in accounts payable and accrued
expenses and $478,279 in related party payables, offset by a gain on the settlement of payables of $89,170 and $324,048 for change in
valuation of derivative liabilities. Significant non-cash activities during the nine months ended September 30, 2009 included prepaid loan
commitment fees for $230,000, prepaid expenses paid with common stock of $461,184, accounts payable paid with common stock of
$312,802, the related party line of credit paid with common stock of $477,220 and related party payables paid with common stock of
$194,462.

Net cash used in operating activities for the nine months ended September 30, 2008 was $1,108,752. The reconciliation of net loss of
$2,190,591 to net cash used in operating activities for the nine months ended September 30, 2008 included non-cash charges of $210,000
for common stock issued as payment of interest expense on the related party line of credit and $123,401 for restricted common stock issued
for services and $111,823 for depreciation and amortization, as well as increases of $171,804 in accounts payable and accrued expenses
and $323,357 in related party payables.

39

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Our investing activities resulted in a net cash inflow of $935,367 for the nine months ended September 30, 2009 in connection with
$1,050,506 in cash acquired from the Merger, offset by $107,087 in spending for international patent filing fee applications. During the nine
months ended September 30, 2008, our net cash outflow from investing activities amounted to $1,340 due to the acquisition of property and
equipment.

Our financing activities resulted in a net cash inflow of $1,124,950 for the nine months ended September 30, 2009 in connection with
$211,000 in proceeds from the line of credit with The RHL Group, $125,000 in proceeds from an unrelated third-party promissory note,
$560,000 in proceeds from the 12% Convertible Promissory Notes, $162,275 from warrant exercises and $68,013 from stock option
exercises. During the nine months ended September 30, 2008, our net cash inflow from financing activities consisted primarily of proceeds
of $606,048 from the sale of stock, as well as $519,034 in proceeds from the line of credit with The RHL Group.

As of September 30, 2009, we had cash and cash equivalents of $450,769 compared to $19,741 at September 30, 2008.

Description of Indebtedness

The RHL Group

In July 2007, we issued a promissory note to The RHL Group to borrow up to $100,000 under a revolving line of credit, which was
subsequently increased to $1,000,000 in August 2007. In July 2007, we also entered into a Security Agreement, pursuant to which MMR
granted a blanket security interest to The RHL Group, Inc. over all of MMR's assets in order to secure the satisfaction of its obligations under
the note. Interest on outstanding loan balances under the note accrued at a rate equal to the lesser of the Wall Street Journal Prime Lending
Rate (7.5% on August 23, 2007) plus 3% or the maximum rate allowed by law under the California Constitution (5% per annum) plus the
rate prevailing at the Federal Reserve Bank of San Francisco on November 25, 2007, for advances to member banks. In addition to interest,
The RHL Group, Inc. received one share of MMR common stock for each dollar drawn on the line of credit, in increments of 100,000, with a
minimum grant of 400,000 shares, for each three month term of the line. In addition, we were required to maintain certain financial
covenants.

In August 2008, we entered into the Second Amended and Restated Promissory Note Agreement (the "RHL Note") with The RHL Group
for the renewal of the $1,000,000 secured line of credit on substantially the same terms, with the one change being the quarterly grant of
shares under the earlier agreement was accelerated to a one time grant of 5,000,000 common shares (including 4,413,053 shares of
Treasury stock) for borrowings of up to $1,000,000 at any time during the twelve month term of the renewal ending on July 31, 2009. In
addition, The RHL Group also received one share of common stock for each dollar of the line of credit, in increments of 100,000, for each 3
month term of the line for borrowings over $1,000,000. The entire unpaid principal and any unpaid interest under the note was due and
payable on July 31, 2009.

The amount of outstanding principal and interest on the renewal date was $751,174. MMR issued The RHL Group a total of 1,400,000
common shares valued at $210,000 under the terms of this agreement during the nine months ended September 30, 2008, which are
included in interest expense. There were no such shares issued during the nine months ended September 30, 2009. These common shares
were converted into shares of MMRIS common stock pursuant to the Merger.

As contemplated by the Merger Agreement and the Creditor Plan, as a condition to the Merger, at the effective time of the Merger, MMR
and The RHL Group entered into an Allonge to the RHL Note and the Security Agreement pursuant to which The RHL Group agreed to
suspend certain of its rights under the Security Agreement and the RHL Note until the earlier of (a) the date that we repay all amounts
outstanding under any promissory notes issued to Old Favrille's creditors under the Creditor Plan, (b) the date that we deposit into an
escrow fund the maximum amount of cash payable in satisfaction of the promissory notes issued to Old Favrille's creditors under the
Creditor Plan or (c) ten days after the two year anniversary of the closing date of the Merger. The suspended rights include any right of The
RHL Group to (1) declare a default or event of default under the Security Agreement or the RHL Note (including for breach of the covenant
for failure to maintain cash availability of at least $125,000), (2)

40

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accelerate the maturity date of the RHL Note, (3) exercise any of its principal
remedies for a default or event of default under the Security Agreement, (4) assign the RHL Note, the proceeds of the RHL Note or to
otherwise negotiate the RHL Note and (5) receive payment of the outstanding principal and interest owing under the RHL Note. We
terminated the Allonge on April 29, 2009 as part of the credit restructuring described immediately below.

On April 29, 2009, we agreed to restructure our secured credit facility with The RHL Group and entered into a Secured Credit
Restructuring Agreement with The RHL Group and Robert H. Lorsch, our Chairman, Chief Executive Officer and President (the
"Restructuring Agreement"), issued The RHL Group a Third Amended and Restated Note (the "Third Amended Note"), and we agreed to
guaranty MMR's obligations under the Third Amended Note (the "Guaranty").

The Third Amended Note amended and restated the RHL Note, matures November 30, 2009, and bears interest at the lesser of 10% or
the highest rate then permitted by law, and is secured (similar to the RHL Note) by the Security Agreement. Although the reserve credit line
has been increased to $3,000,000, The RHL Group is only obligated to make a minimum of $100,000 of loans, advances and guarantees
under the Third Amended Note within 30 days of execution pursuant to the Restructuring Agreement. The RHL Group was due to receive,
as an origination fee ("Fee"), a promissory note for $200,000, bearing interest at 10% per annum and due on demand. On August 17, 2009,
the Company paid the 200,000 origination fee by granting 2,800,000 shares of common stock to The RHL Group.

On August 18, 2009, the Company and The RHL Group entered into a Waiver Agreement, pursuant to which, in consideration of The
RHL Group's waiver of MMR's payment default under the Third Amended Note, the Company granted to The RHL Group a warrant to
purchase an aggregate of 11,039,378 shares of the Company's common stock, with an exercise price equal to $0.13 per share, the closing
price of the Company's common stock on the date immediately preceding the date of grant. Under the Waiver Agreement, The RHL Group
agreed to waive MMR's payment default until August 31, 2009, which waiver period will automatically continue until The RHL Group notifies
MMR otherwise. In addition, as repayment of the unpaid origination fee owed to The RHL Group by MMR in connection with the credit line
restructuring, the Company granted to The RHL Group 2,800,000 shares of common stock.

On August 17, 2009, in consideration of a personal guaranty given by Robert H. Lorsch, the Company's Chairman, Chief Executive
Officer and President, to a vendor, to guarantee payments due to the vendor from the Company for services rendered, the Company
granted Mr. Lorsch (i) a warrant to purchase 706,605 shares of Company common stock, at an exercise price of $0.13 per share, the closing
price of the Company's common stock on the date immediately preceding the date of grant, and (ii) 141,321 shares of Company common
stock.

As of September 30, 2009, we had an outstanding balance on the RHL Note of $1,678,071. The components of the $1,678,071 RHL
Group Note payable and the related balance sheet presentation as of September 30, 2009 are: (1) $1,007,010, which is included in the line
of credit, related party payable; (2) $301,343, which is related to bank overdrafts, credit card charges and a vendor guaranty is included in
accounts payable and accrued expenses; and (3) $369,718, which is related to deferred salary and consulting expenses is included in
related party payables. Interest expense on this note for the three months ended September 30, 2009 and 2008 amounted to $39,587
(unaudited) and $19,098 (unaudited), respectively. Interest expense on this note for the nine months ended September 30, 2009 and 2008
amounted to $87,656 (unaudited) and $42,054 (unaudited), respectively. The unpaid interest balance as of September 30, 2009 and
December 31, 2008 was $111,718 (unaudited) and $24,963 (unaudited), respectively.

In addition, under the Restructuring Agreement, The RHL Group agreed to use commercially reasonable efforts to raise additional
financing from third parties, and agreed to extend the maturity of the Third Amended Note for an additional six-month term if we are in full
compliance with our covenants and other obligations under the Third Amended Note, on terms to be negotiated at such time. Additionally,
Mr. Lorsch agreed to exercise all of his outstanding options prior to May 1, 2009 (which were exercised April 30, 2009), which resulted in an
$113,220 reduction in principal owing The RHL Group. Finally, as a condition to agreeing to restructure our secured credit arrangement, we
also terminated the Allonge. Thus, if at any time after June 1, 2009 we are not in compliance with our covenants under the Third Amended
Note or Security Agreement, The RHL Group may, but is not obligated to, declare an event of default. In conjunction with the Third
Amended Note, MMR was required to maintain certain

41

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financial covenants, including the requirement that MMR have at least $100,000 in
cash in its bank accounts or such other amount as necessary to maintain operations through the subsequent thirty (30) days and timely pay
any obligations due respecting payroll and all associated payroll taxes on and after June 1, 2009. As of September 30, 2009, MMR was in
compliance with its financial covenants under the terms of the Third Amended Note.

Creditor Plan

We are obligated to make installment payments of $853,000 under the Creditor Plan (including payments under the transition
employment agreements of our former Chief Executive Officer and former Chief Financial Officer). For additional information relating to the
Creditor Plan see Exhibit 10.1 of our current report on Form 8-K filed on November 13, 2008.

Concurrent with the execution of the Merger Agreement, Favrille entered into a Creditor Plan with MMR and Kershaw, Mackie &
Co., as the administrative agent (the "Creditor Plan"), which provided for the negotiation and settlement of Favrille's outstanding liabilities
with certain of Favrille's officers, directors and trade creditors (the "Favrille Creditors"). Pursuant to the terms and conditions of the Creditor
Plan, we issued interest-free promissory notes to the Favrille Creditors, which, as of September 30, 2009, had an aggregate outstanding
balance of $853,000. The principal under such notes is payable in 18 equal installments beginning on August 2, 2009. We did not make the
first installment payment that was due on August 2, 2009 and have not made any payments as of September 30, 2009. There is no
acceleration provision or other penalty upon an event of default, except as is otherwise provided for under applicable law.

Promissory Notes

On October 1, 2008, concurrent with the execution of the term sheet for the Merger, Favrille advanced MMR $100,000 pursuant to a
promissory note issued by MMR to Favrille dated September 30, 2008 (the "First Bridge Note"), which is to be used solely for paying MMR's
out of pocket expenses incurred in connection with the Merger. On November 10, 2008 (the first business day after execution of the Merger
Agreement), Favrille advanced MMR an additional $500,000 pursuant to a promissory note issued by MMR to Favrille (the "Second Bridge
Note,") and on December 22, 2008, January 8, 2009 and January 15, 2009, Favrille advanced MMR an additional $100,000, $35,000 and
$50,000, respectively, pursuant to promissory notes issued by MMR to Favrille (the "Supplemental Bridge Notes" and together with the First
Bridge Note and the Second Bridge Note, the "Promissory Notes") in each case, solely for MMR's use in paying its out of pocket expenses
incurred in connection with the Merger and its operating expenses. Principal outstanding under the Promissory Notes accrued interest at the
applicable federal rate of interest per annum, or the maximum rate permissible by the laws in California relating to permissible rates of
interest on commercial loans, whichever is less. Because the Merger occurred, the principal and interest under the Promissory Notes has
automatically been treated as a contribution to capital to MMR and the Promissory Notes have been fully discharged in accordance with
their terms.

On June 11, 2009, the Company entered into a promissory note agreement to borrow $125,000 with an unrelated third-party. The
promissory note is due and payable July 30, 2011, and bears interest of 12% per annum payable quarterly beginning on January 1, 2010.
The proceeds of the loan will be used by the Company for the filing of international patent applications to expand and perfect the patent
rights of the Company in the Anti-CD20 Antibodies outside the United States. The unrelated third-party also received, as a commitment fee,
a payable for $30,000, due and payable by August 15, 2009. The commitment fee was payable at the Company's option in cash or warrants
to acquire 375,000 shares of our common stock at an exercise price per share equal to the lesser of (i) $0.15 per share and (ii) the weighted
average trading price for a share of common stock for the ten consecutive trading days preceding the date on which the warrant is
exercised. The warrants have a four year term. On July 29, 2009, we elected to pay the commitment fee through the issuance of warrants
exercisable into 375,000 shares of our common stock at an exercise price of $0.14 per share. The warrants vested immediately. These
warrants were valued using the Black-Scholes option pricing model. The total value of these warrants amounted to $32,399 (unaudited), all
of which will be recorded as a reduction to the commitment fee payable in July 2009, with a loss on settlement payables for $2,399.

42

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In July, August and September 2009, the Company also entered into five different Note and Warrant Subscription Agreements (the
"Note Agreements") with four separate individuals (the "Note Purchasers").  Pursuant to the terms of the Note
Agreements, the Note Purchasers purchased convertible notes in an aggregate amount of $560,000 (the "Notes"). The Notes
carry an annual interest rate of 12%. The Notes are convertible at the option of the Note Purchasers into a number of shares of the
Company's common stock, par value $0.001 per share, equal to the product of eighty percent (80%) multiplied by the arithmetic average of
the dollar volume-weighted average price ("VWAP") of the Company's common stock for the ten (10) consecutive trading days ending on
the day that is three (3) trading days prior to the applicable conversion date. On September 15, 2009 two of the Note Purchasers converted
their notes totaling $400,000 in exchange for a total of 5,555,556 shares of the Company's common stock.

MMR AU License

In February 2006, the Company entered into a letter agreement with MyMedicalRecords.com.au ("MMR AU")
granting it a 10 year exclusive right to market and sell the Company's products and services in Australia and New
Zealand. The controlling shareholder of MMR AU was, at the time of the signing of the initial letter agreement, a
shareholder of the Company. This letter agreement was subsequently formalized in the form of a ten year license
agreement in October 2007, at which time the controlling shareholder of MMR AU was no longer a shareholder of the
Company. The Company terminated the license agreement on September 30, 2009.

The Company received $50,000 from MMR AU upon the signing of the letter agreement in February 2006 towards
set up costs of the platform to be used by customers of MMR AU. The Company completed the setup of the platform for
MMR AU in 2007, at which time it started to recognize this amount into revenue over the 10 year license term. The Company also received $150,000
in 2007 from MMR AU towards the minimum guarantee payment for years 2 and 3 of the license term. This amount has
been deferred and is being recognized as income based on the number of months elapsed. On September 30, 2009 the
license agreement was terminated and the balance remaining in deferred revenue of $32,082 was recognized as license
fee revenue. During the three months ended September 30, 2009 and 2008, the Company amortized $33,332
(unaudited) and $20,000 (unaudited), respectively, of these amounts as license fee and other revenues in the
accompanying statement of operations. During the nine months ended September 30, 2009 and 2008, the Company
amortized $48,332 (unaudited) and $60,000 (unaudited), respectively, of these amounts as license fee and other
revenues in the accompanying statement of operations. The Company has accounted for this transaction under ASC
605-025 (formerly EITF 00-21, "Revenue Arrangements with Multiple Deliverables").

The company had reported third quarter 2009 revenues of $221,239 in a news release dated
October 12, 2009 and in a corresponding 8K filed on October 14, 2009.  At a November 12, 2009 meeting of the Audit
Committee regarding this quarter's review it was determined by the Company that these revenues should not be
recognized due to the uncertainty of their collectability as a result of the termination of the license agreement.  This
decision accounts for the reduction in revenue discussed in the October 12, 2009 news release to $163,271 for the third
quarter of 2009.

Commitments and Contingencies

Under the terms of an agreement with an investor who purchased $500,000 of MMR's Series B Preferred shares in 2006, the
Company entered into an agreement to invest $250,000 in a joint venture with the investor to establish an entity to market and sell the
Company's services in the countries of Japan, China, Korea, Taiwan and Thailand. The Company has paid $100,000 to date of this amount
which the Company has expensed during the 3 months ended June 30, 2009 as the Company has since terminated its relationship with the
investor. To date, no joint venture has not been formalized or incorporated, and no operations haven commenced and there are no
employees. The Company and the investor are still in the process of setting up this operation. In September 2007, The RHL Group,
provided the investor with a guarantee that the Company would meet its obligations under this agreement in exchange for 300,000 shares of
restricted MMR common stock valued at $39,000. As consideration for renewing the guarantee when it expired in September 2008, in
January 2009, MMR issued The RHL Group 100,000 shares of MMR common stock, which became 328,174 shares of MMRIS common
stock upon the closing of the Merger, valued at approximately $5,000 (unaudited). This expense has been reflected in general and
administrative expenses in the accompanying consolidated statement of operations for the nine months ended September 30, 2009. As a
result of the Company terminating this agreement, the Company is free to explore other business opportunities in the territory separate from
the investor specifically at this time in China and Japan.  The Company, at its option, may still involve the investor in these business
activities under a separate agreement.

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On August 17, 2009, Robert H. Lorsch, the Company's Chairman, Chief Executive Officer and President, agreed to guarantee
$282,641in payments due to the vendor from the Company for services rendered. On August 17, 2009, in consideration of a personal
guaranty given by Mr. Lorsch, the Company granted Mr. Lorsch (i) a warrant to purchase 706,605 shares of Company common stock, at an
exercise price of $0.13 per share, the closing price of the Company's common stock on the date immediately preceding the date of grant,
and (ii) 141,321 shares of Company common stock.

For additional information relating to this and other commitments and contingencies, please see note 6 to our financial statements
appearing elsewhere in this quarterly report on Form 10-Q.

Off-Balance Sheet Arrangements

As of September 30, 2009 and December 31, 2008, we had no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Intentionally omitted.



Item 4T. Controls and Procedures

Disclosure Controls and Procedures

In evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how
well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is
required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management evaluated,
with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this quarterly report on Form 10-Q. Due to the existence of material weaknesses
described below, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are
not effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of
1934 (1) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules
and forms, and (2) is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

Notwithstanding the conclusion that our disclosure controls and procedures were not effective as of the end of the period covered by
this report, the Chief Executive Officer and the Chief Financial Officer believe that the consolidated financial statements and other
information contained in this annual report present fairly, in all material respects, our business, financial condition and results of
operations.

Material Weakness in Internal Control over Financial Reporting

As management has previously noted and disclosed, we have significant deficiencies in our internal control over financial
reporting that were considered to be material weaknesses. These include our inadequate financial statement close process, our lack of
financial expertise and accounting staff, our lack of supporting documentation and schedules, our inadequate journal entry review process,
and our inadequate approval and documentation for equity grants. See Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Internal Control Over Financial Reporting" above. We have already hired an outside consultant to
develop and implement formal policies and procedures regarding the preparation of our financial statements. This process is still underway
and was not complete as of the end of the period covered by this report. We also plan to hire experienced accounting staff with SEC public
company experience.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the third quarter of 2009 that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. During the third quarter of 2009 we
hired outside SoX consultants and the SoX consultants are in the process of better documenting our internal control policies and
procedures. We expect improvement in the internal control over financial reporting as we formalize our internal control policies and
procedures.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

Intentionally omitted.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Since our disclosure on September 16, 2009, we have made the following unregistered sales of equity securities:

In July, August and September 2009, the Company also entered into five different Note and Warrant Subscription Agreements (the
"Note Agreements") with four separate individuals (the "Note Purchasers").  Pursuant to the terms of the Note
Agreements, the Note Purchasers purchased convertible note in an aggregate amount of $560,000 (the "Notes").  The Notes
carry an annual interest rate of 12%. The Notes are convertible at the option of the Note Purchasers into a number of shares of the
Company's common stock, par value $0.001 per share, equal to the product of eighty percent (80%) multiplied by the arithmetic average of
the dollar volume-weighted average price ("VWAP") of the Company's common stock for the ten (10) consecutive trading days ending on
the day that is three (3) trading days prior to the applicable conversion date.  In connection with the Note Agreements, we issued warrants to
purchase up to 3,110,000 shares of our common stock at a per share price equal to the lesser of (i) the product of fifty percent (50%)
multiplied by the arithmetic average of the VWAP of the Shares for the ten (10) consecutive trading days ending on the day that is three (3)
trading days prior to the applicable exercise date, or (ii) $0.15, whichever is less (the "Warrants"). The Warrants expire in July,
August and September of 2012.

On September 30, 2009, we granted to a consultant, a grant of 250,000 shares of the Company's common stock at a price per share
value of $0.09, in consideration of consulting and other services performed for the Company.

On September 30, 2009, we granted to vendor, a grant of 2,270,000 shares of the Company's common stock at a price per share value
of $0.09, in consideration of consulting and other services performed for the Company.

On September 25, 2009, we granted to a consultant, a grant of 382,022 shares of the Company's common stock at a price per share
value of $0.089, in consideration of consulting and other services.

On November 5, 2009, we entered into an additional Note and Warrant Subscription Agreement (the "November Note
Agreement") with an unrelated third-party.  Pursuant to the terms of the November Note Agreement, the unrelated third-party
purchased a convertible note in the amount of $100,000 (the "November Note").  The November Note carries an annual interest
rate of 12%. The November Note is convertible at the option of the unrelated third-party into a number of shares of the Company's common
stock, par value $0.001 per share, equal to the product of eighty percent (80%) multiplied by the arithmetic average of the dollar volume-
weighted average price ("VWAP") of the Company's common stock for the ten (10) consecutive trading days ending on the day that is three
(3) trading days prior to the applicable conversion date.  In connection with the November Note, we issued a warrant to purchase up to
600,000 shares of our common stock at a per share price equal to the lesser of (i) the product of fifty percent (50%) multiplied by the
arithmetic average of the VWAP of the Shares for the ten (10) consecutive trading days ending on the day that is three (3) trading days prior
to the applicable exercise date, or (ii) $0.15, whichever is less (the "Warrants"). The Warrant expires on November 4, 2012.

45

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We have granted all such securities described above in reliance on the exemption provided by Section 4(2) of the Securities Act of
1933, as amended.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

|Exhibit
Number |  | Description of Exhibits                                                                                                                                      
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                              
|10.1           |  | + Licensing and Sales Commission Agreement, dated September 16, 2009, by and among  MMR Information Systems, Inc.,
E-Mail Frequency, LLC and David T. Loftus.
|               |  |                                                                                                                                                              
|31.1           |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                                        
|               |  |                                                                                                                                                              
|31.2           |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                                        
|               |  |                                                                                                                                                              
|32.1           |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.             
|               |  |                                                                                                                                                              
|32.2           |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.             

__________

+   Portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24-b-2 of the
Exchange Act. The omitted material has been separately filed with the Securities and Exchange Commission.

46

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

Date:   November 16, 2009

MMR Information Systems, Inc.

By:/s/ Robert H.
Lorsch     Robert H. Lorsch
     Chairman, Chief Executive Officer and
     President

By:/s/ Naj
Allana     Naj Allana
     Chief Financial Officer

47

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EXHIBIT INDEX

Exhibit
Number

Description of Exhibits10.1

+ Licensing and Sales Commission Agreement, dated September 16, 2009, by and among  MMR Information Systems, Inc.,
E-Mail Frequency, LLC and David T. Loftus.    PDF as a courtesy31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.32.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.__________

+   Portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24-b-2 of the
Exchange Act. The omitted material has been separately filed with the Securities and Exchange Commission.




48