|   | UNITED STATES |
|--------|---------------|

|   | SECURITIES AND EXCHANGE COMMISSION |
|--------|------------------------------------|

|   | WASHINGTON, D.C. 20549 |
|--------|------------------------|

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

|  Delaware                                                       |   |  98-0513637                           |
|----------------------------------------------------------------------|--------|--------------------------------------------|
|  (State or other jurisdiction of incorporation or organization) |   |  (I.R.S. Employer Identification No.) |

|   |  2010 FM 2673                                                                |   |
|--------|-----------------------------------------------------------------------------------|--------|
|   |  Canyon Lake, Texas  78133                                         |   |
|   |  (Address of principal executive offices)                                    |   |
|   |                                                                              |   |
|   |  (830) 964-3838                                                              |   |
|   |  (Registrant’s telephone number, including area code)                  |   |
|   |                                                                              |   |
|   |  Securities registered pursuant to Section 12(b) of the Act:  None |   |
|   |                                                                              |   |
|   |  Securities registered pursuant to Section 12(g) of the Act:                 |   |
|   |  Common Stock, $0.0001 par value                                             |   |
|   |  (Title of Class)                                                            |   |
|   |  __________________________________                                          |   |

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

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|   Table of Contents |
|-------------------------------|
|                          |   |   |  Page |
|  PART I                  |   |   |  1 |
|                          |  ITEM 1. |  BUSINESS |  1 |
|                          |  ITEM 1A. |  RISK FACTORS |  4 |
|                          |  ITEM 1B. |  UNRESOLVED STAFF COMMENTS |  11 |
|                          |  ITEM 2. |  PROPERTIES |  11 |
|                          |  ITEM 3. |  LEGAL PROCEEDINGS |  11 |
|                          |  ITEM 4. |  (REMOVED AND RESERVED) |  11 |
|                          |   |   |   |
|  PART II                 |   |   |  12 |
|                          |  ITEM 5. |  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |  12 |
|                          |  ITEM 6. |  SELECTED FINANCIAL DATA |  13 |
|                          |  ITEM 7A. |  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  13 |
|                          |  ITEM 8. |  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |  17 |
|                          |  ITEM 9. |  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |  17 |
|                          |  ITEM 9A. |  CONTROLS AND PROCEDURES |  17 |
|                          |  ITEM 9B. |  OTHER INFORMATION |  17 |
|                          |   |   |  18 |
|  PART III                |   |   |   |
|                          |  ITEM 10. |  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |  19 |
|                          |  ITEM 11. |  EXECUTIVE COMPENSATION |  19 |
|                          |  ITEM 12. |  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |  19 |
|                          |  ITEM 13. |  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |  19 |
|                          |  ITEM 14. |  PRINCIPAL ACCOUNT FEES AND SERVICES |  19 |
|                          |   |   |   |
|  PART IV                 |   |   |  19 |
|                          |  ITEM 15. |  EXHIBITS, FINANCIAL STATEMENT SCHEDULES |  19 |
|                          |   |  SIGNATURES |  21 |
|                          |   |  INDEX TO EXHIBITS |  22 |
|                          |   |   |   |
|                          |  INDEX TO FINANCIAL STATEMENTS |  F-1 |
|                          |  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |  F-2 |
|                          | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |  F-3 |
|                          |   |   |   |

----

PART I 

| ITEM 1.   | BUSINESS |
|---------------------|----------|

----

| ·  | We incur start-up costs and recurring fixed costs to establish and maintain the service.                                                    |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | We acquire subscribers and bring them onto the service, which requires variable acquisition costs related to sales, installation and deployment. |

| ·  | Subscribers are recruited with the goal of reaching a level of aggregate subscriber payments that exceeds the fixed (and variable) recurring service costs.               |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | Adding new subscribers at a high rate and having a high renewal rate among existing subscribers is essential to attaining positive cash flow from operations in the near term. |

----

----

ITEM 1A.                      RISK FACTORS

|   | • | our ability to market and sell our COPsync service for a profit; |
|--------|---------|------------------------------------------------------------------|

|   | • | our ability to recruit and retain skilled personnel; and |
|--------|---------|----------------------------------------------------------|

|   | • | our evolving business model |
|--------|---------|-----------------------------|

----

|   | • |   | longer operating histories;                                         |
|--------|---------|--------|---------------------------------------------------------------------|
|   | • |   | greater financial, technical, marketing, sales and other resources; |
|   | • |   | positive cash flows from operations;                                |
|   | • |   | greater name recognition;                                           |
|   | • |   | a broader range of products to offer; and                           |
|   | • |   | a larger installed base of customers                                |

----

----

----

----

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| ·   | make an individualized written suitability determination for the purchaser; and |
|--------------------|---------------------------------------------------------------------------------|

| ·   | receive the purchaser’s written consent prior to the transaction. |
|--------------------|-------------------------------------------------------------------------|

|   | • | actual or anticipated fluctuations in our quarterly and annual results; |
|--------|---------|-------------------------------------------------------------------------|

|   | • | changes in market valuations of companies in our industry; |
|--------|---------|------------------------------------------------------------|

|   | • | announcements by us or our competitors of new strategies, significant contracts, acquisitions, strategic relationships, joint ventures, capital commitments or other material developments that may affect our prospects; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | shortfalls in our operating results from levels forecasted by securities analysts; |
|--------|---------|------------------------------------------------------------------------------------|

|   | • | additions or departures of our key personnel; |
|--------|---------|-----------------------------------------------|

|   | • | sales of our capital stock in the future; |
|--------|---------|-------------------------------------------|

|   | • | liquidity or cash flow constraints; and |
|--------|---------|-----------------------------------------|

|   | • | fluctuations in stock market prices and volume, which are particularly common for the securities of highly volatile companies pursuing untested strategies |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 1B.                      UNRESOLVED STAFF COMMENTS

ITEM 2.                        PROPERTIES

ITEM 3.                        LEGAL PROCEEDINGS

ITEM 4.                        (REMOVED AND RESERVED)

----

PART II

ITEM 5.                        MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES 

|               |   | Price Range |   |
|--------------------|--------|-------------|--------|
| Quarter Ending     |   | High        |   |   | Low |   |
| September 30, 2008 |   | $           | 1.35   |   |   | $ | 1.00 |   |
| December 31, 2008  |   |        | 1.20   |   |   |   | 0.25 |   |
| March 31, 2009     |   |        | 0.60   |   |   |   | 0.06 |   |
| June 30, 2009      |   |        | 0.76   |   |   |   | 0.18 |   |
| September 30, 2009 |   |        | 0.51   |   |   |   | 0.10 |   |
| December 31, 2009  |   |        | 0.14   |   |   |   | 0.07 |   |
| March 31, 2010     |   |        | 0.10   |   |   |   | 0.07 |   |
| June 30, 2010      |   |        | 0.14   |   |   |   | 0.08 |   |
| September 30, 2010 |   |        | 0.10   |   |   |   | 0.07 |   |
| December 31, 2010  |   |        | 0.12   |   |   |   | 0.07 |   |

----

ITEM 6.                        SELECTED FINANCIAL DATA

ITEM 7.                        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

----

----

| ·   | Rebuilding Backlog:  We have revamped our sales team and instituted sales management processes to rebuild the sales backlog and secure customers orders.  Our progress to date can be summarized as follows at March 23, 2011: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | We had generated a backlog of new, executed, not-performed contracts totaling approximately $600,000, and |
|---------------|-----------------------------------------------------------------------------------------------------------|

----

| o   | We had generated a quote log of formal quotes submitted to prospective customers after substantive discussions with the prospective customer and the Company.  The revenue related value of these business opportunities is approximately $9,167,000.  We do not know with certainty when these quotes will become executed contracts, or if they ever will; however, our management and the sales staff focuses on them weekly with emphasis on working with the prospective customers to identify and resolve roadblocks that would prevent the deal from closing.  We believe, based on previous experience, that the quote log will yield executed contracts that will generate approximately $2,000,000 in cash receipts by December 31, 2011. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Capital Funding.  As of April 13, 2011, we had obtained written subscriptions for new capital approximating $1,220,000.  The investment options were an equity transaction, or a convertible note, in each case as described below.  The split between those investors subscribing for the equity transaction and a convertible note is $618,000 and $602,000, respectively.  Cash proceeds from both investment options of approximately $815,000 had been collected as of April 13, 2011. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | The terms of the equity transaction are as follows:  An equity unit shall consist of five shares of our common stock and a warrant to acquire one share of our common stock for a purchase price of $0.50 per unit, ($0.10 per share of common stock). The exercise price of the warrants is $0.20 per share of common stock and the warrants expire March 31, 2015. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | The terms of the convertible notes are as follows:  The notes are due and payable on March 31, 2014.  The notes bear annual simple interest of three percent.  The first interest payment shall be due on January 2, 2012 and interest shall be paid quarterly thereafter.  The notes may be converted at the holder’s option into share of our common stock at a conversation rate of $0.10 per share. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other initiatives: |
|--------------------|--------------------|

| o   | In 2011, we anticipate receiving cash totaling $165,000 in licensing fees from two existing OEM distributors.  These agreements relate to our efforts to create a network of OEM distributors to the law enforcement industry. This effort is part of our corporate strategy to expand our geographical footprint throughout the United States.  For the two particular OEM distributors, we will issue to the distributor shares of our common stock valued at the time the payment is made.  These shares of common stock are subject to transfer restrictions, and may not be sold, licensed, hypothecated or otherwise transferred by the distributor until the tenth anniversary of the issuance date, provided that these transfer restrictions lapse pro-rata and quarterly over ten years and the share transfer restrictions lapse entirely if the distributor achieves certain sale milestones. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                         |   | Payments Due by Period |    |
|--------------------------------------------------------------|--------|------------------------|---------|
|                                                         |   | Total                  |    |   | 2011 |   |   |   | 2012-2013 |   |   |   | 2014-2015 |   |   | After 2015 |   |
|  Contractual Obligations                                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Long-Term Debt Obligations                             |   | $                      | 114,045 |   |   | $ | 49,620 |   |   | $ | 42,439 |   |   | $ | 21,986 |   |   | $ | - |   |
|  Capital Lease Obligations                              |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|  Operating Lease Obligations                            |   | $                      | 161,025 |   |   | $ | 56,183 |   |   | $ | 104,842 |   |   | $ | - |   |   | $ | - |   |
|  Purchase Obligations                                   |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|  Other Long-Term Liabilities                            |   | $                      | 130,000 |   |   | $ | 100,000 |   |   | $ | 30,000 |   |   | $ | - |   |   | $ | - |   |
|         Total Contractual |   | $                      | 405,070 |   |   | $ | 205,803 |   |   | $ | 177,281 |   |   | $ | 21,986 |   |   | $ | - |   |

ITEM 7A.                       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.                        FINANCIAL STATEMETNS AND SUPPLEMENTARY DATA

ITEM 9.                        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A.                       CONTROLS AND PROCEDURES

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ITEM 9B.                      OTHER INFORMATION

----

PART III                      

ITEM 10.                       DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.                       EXECUTIVE COMPENSATION

ITEM 12.                       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13.                       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE

ITEM 14.                       PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV                      

ITEM 15.                       EXHIBITS, FINANCIAL STATEMENT SCHEDULES

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Page      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Report of Independent Registered Public Accounting Firm                                                                                                              | F–2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Balance Sheets                                                                                                                                                       | F-3       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Statements of Operations                                                                                                                                             | F-5       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Statements of Stockholders’ Equity                                                                                                                             | F-6       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Statements of Cash Flows                                                                                                                                             | F-9       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |
| Notes to the Financial Statements                                                                                                                                    | F-11      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |      |

----

----

SIGNATURES

|                 | COPSYNC, INC. |                        |
|----------------------|---------------|-----------------------------|
|                 |          |                        |   |
| Date: April 15, 2011 | By:           | /s/ Ronald A. Woessner |   |
|                 |          | Ronald A. Woessner          |   |
|                 |          | Chief Executive Officer     |   |
|                 |          |                        |   |

|      |                     |                                |                 |   |
|-----------|--------------------------|-------------------------------------|----------------------|--------|
|      |                     |                                |                 |   |
|  /s/ |  RONALD A. WOESSNER |  Chief Executive Officer       |  April 15, 2011 |   |
|      |  Ronald A. Woessner |  (Principal Executive Officer) |                 |   |
|      |                     |                                |                 |   |
|  /s/ |  BARRY W. WILSON    |  Chief Financial Officer       |  April 15, 2011 |   |
|      |  Barry W. Wilson    |  (Principal Financial Officer) |                 |   |
|      |                     |                                |                 |   |
|  /s/ |  RUSSELL CHANEY     |  Chairman and Director         |  April 15, 2011 |   |
|      |  Russell Chaney     |                                |                 |   |
|      |                     |                                |                 |   |
|  /s/ |  SHANE RAPP         |  President and Director        |  April 15, 2011 |   |
|      |  Shane Rapp         |                                |                 |   |
|      |                     |                                |                 |   |

----

INDEX TO EXHIBITS

| Exhibit Number |   | Description                                                                                                                                                                                                                                                                                     |
|----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                                                                                            |
| 2.1            |   | Share Exchange Agreement dated April 25, 2008 by and between Global Advance Corp. and PostInk Technology LP. (Incorporated herein by reference to registrant’s Current Report on Form 8-K filed with the Commission on May 1, 2008).                                                      |
|           |   |                                                                                                                                                                                                                                                                                            |
| 3.1            |   | Amended and Restated Certificate of Incorporation filed on September 2, 2009 (Incorporated by reference to registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009).                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                            |
| 3.2            |   | Certificate of Designations of Series B Convertible Preferred Stock filed on October 14, 2009 (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).                                                                   |
|           |   |                                                                                                                                                                                                                                                                                            |
| 3.3            |   | Bylaws (Incorporated by reference to registrants Registration Statement on Form SB-2 (Registration No. 333-140320)).                                                                                                                                                                            |
|           |   |                                                                                                                                                                                                                                                                                            |
| 4.1            |   | Form of Common Stock Certificate (Incorporated by reference to registrant’s Registration Statement on Form SB-2 (Registration No. 333-140320)).                                                                                                                                           |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.2           |   | Form of Warrant, dated as of October 14, 2009, issued by registrant to the investors in its Series B Preferred Stock (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).                                            |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.3           |   | Investors’ Rights Agreement, dated as of October 14, 2009, by and among registrant and the investors in its Series B Preferred Stock (excluding exhibits) (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009). |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.4           |   | Amended and Restated Executive Employment Agreement, dated April 29, 2009, by and between Russell D. Chaney and registrant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009)                                   |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.5           |   | Amended and Restated Executive Employment Agreement, dated April 29, 2009, by and between J. Shane Rapp and registrant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009)                                       |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.6*          |   | Stock Restriction Agreement, dated as of August 27, 2010, by and between Ronald A. Woessner and registrant.                                                                                                                                                                                     |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.7           |   | Form of Indemnification Agreement, dated as of October 14, 2009, by and between registrant and its officers and directors (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).                                       |
|           |   |                                                                                                                                                                                                                                                                                            |
| 10.8           |   | Registrant’s 2009 Long-Term Incentive Plan (Incorporated by reference to registrant’s Registration Statement on Form S-8 (Registration No. 333-161882)).                                                                                                                       |
| 10.9           |   | Form of Warrant, issued by the registrant to certain investors (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on April 6, 2011).                                                                                                |
| 10.10          |   | Form of Convertible Note, issued by the registrant to certain investors (Incorporated by reference to the registrant’s Current Report on Form 8-k filed with the Commission on April 6, 2011)                                                                                        |
| 23.1*          |   | Consent of Morrill & Associates, LLC                                                                                                                                                                                                                                                   |
| 31.1*     |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                                                                                                                                         |
| 31.2*          |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                                                                                                                                         |
| 32.1*          |   | Section 1350 Certifications.                                                                                                                                                                                                                                                                    |

| * | Filed herewith. |
|---|-----------------|

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|                                                          |  C O N T E N T S |       |
|---------------------------------------------------------------|-----------------------|------------|
|                                                          |                  |       |
|  Report of Independent Registered Public Accounting Firm |                  |  F-2  |
|                                                          |                  |       |
|  Balance Sheets                                          |                  |   F-3 |
|                                                          |                  |       |
|  Statements of Operations                                |                  |   F-5 |
|                                                          |                  |       |
|  Statements of Stockholders’ Equity                |                  |  F-6  |
|                                                          |                  |       |
|  Statements of Cash Flows                                |                  |   F-9 |
|                                                          |                  |       |
|  Notes to the Financial Statements                       |                  |  F-11 |

----

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| COPSYNC, INC.                            |   |
|------------------------------------------|--------|
| Balance Sheets                           |   |
|                                     |   |   |   |   |   |   |
| ASSETS                                   |   |
|                                     |   |   |   |   |   |   |
|                                     |   | December 31, |   |
|                                     |   | 2010 |   |   | 2009 |   |
| CURRENT ASSETS                           |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |
| Cash and cash equivalents (Note 2)       |   | $ | 240,154 |   |   | $ | 1,141,534 |   |
| Accounts receivable, net (Note 2)        |   |   | 148,939 |   |   |   | 40,371 |   |
| Prepaid expenses and other               |   |   | 46,021 |   |   |   | 14,972 |   |
|                                     |   |   |   |   |   |   |   |   |
| Total Current Assets                     |   |   | 435,114 |   |   |   | 1,196,877 |   |
|                                     |   |   |   |   |   |   |   |   |
| PROPERTY AND EQUIPMENT (Note 2)          |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |
| Computer hardware                        |   |   | 52,363 |   |   |   | 52,363 |   |
| Computer software                        |   |   | 18,259 |   |   |   | 18,259 |   |
| Fleet vehicles                           |   |   | 156,183 |   |   |   | 77,209 |   |
| Furniture and fixtures                   |   |   | 50,832 |   |   |   | 45,832 |   |
|                                     |   |   |   |   |   |   |   |   |
| Total Property and Equipment             |   |   | 277,637 |   |   |   | 193,663 |   |
| Less: Accumulated Depreciation           |   |   | (128,056 | ) |   |   | (98,505 | ) |
|                                     |   |   |   |   |   |   |   |   |
| Net Property and Equipment               |   |   | 149,581 |   |   |   | 95,158 |   |
|                                     |   |   |   |   |   |   |   |   |
| OTHER ASSETS                             |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |
| Software development costs, net (Note 2) |   |   | 1,745,896 |   |   |   | 2,345,375 |   |
| Debt issuance costs, net                 |   |   | 4,208 |   |   |   | 16,708 |   |
| Investments (Note 2)                     |   |   | - |   |   |   | 50,000 |   |
| Lease security deposit                   |   |   | - |   |   |   | 750 |   |
|                                     |   |   |   |   |   |   |   |   |
| Total Other Assets                       |   |   | 1,750,104 |   |   |   | 2,412,833 |   |
|                                     |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                             |   | $ | 2,334,799 |   |   | $ | 3,704,868 |   |
|                                     |   |   |   |   |   |   |   |   |

----

| COPSYNC, INC.                                                                                                                                                   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Balance Sheets (Continued)                                                                                                                                      |   |
|                                                                                                                                                            |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                            |   |
|                                                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                                                            |   | December 31, |   |
|                                                                                                                                                            |   | 2010 |   |   | 2009 |   |
| CURRENT LIABILITIES                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |
| Accounts payable and accrued expenses                                                                                                                           |   | $ | 590,465 |   |   | $ | 508,772 |   |
| Accrued settlement costs (Note 9)                                                                                                                               |   |   | 220,000 |   |   |   | - |   |
| Preferred stock dividends payable (Note 5)                                                                                                                      |   |   | 126,576 |   |   |   | 21,690 |   |
| Deferred revenues on hardware, installation, and licensing contracts, current portion, net of deferred costs (Note 2)                                           |   |   | 746,513 |   |   |   | 169,453 |   |
| Convertible notes payable, current portion, net of note discount of $-0-, respectively (Note 4)                                                            |   |   | 6,249 |   |   |   | 472,000 |   |
| Notes payable, current portion (Note 3)                                                                                                                         |   |   | 149,621 |   |   |   | 12,551 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Total Current Liabilities                                                                                                                                       |   |   | 1,839,424 |   |   |   | 1,184,466 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| LONG-TERM LIABILITIES                                                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Deferred revenues on hardware, installation, and licensing contracts (Note 2)                                                                              |   |   | 373,951 |   |   |   | 363,840 |   |
| Convertible notes payable,net of note discount of $14,589 and $46,041, respectively (Note 4)                                                               |   |   | 29,162 |   |   |   | 13,959 |   |
| Notes payable (Note 3)                                                                                                                                          |   |   | 104,984 |   |   |   | 33,732 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Total Long-Term Liabilities                                                                                                                                     |   |   | 508,097 |   |   |   | 411,531 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                                                                                               |   |   | 2,347,521 |   |   |   | 1,595,997 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES (Note 9)                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                                            |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Series A Preferred stock, par value $0.0001 per share, 100,000 shares authorized; 100,000 shares issued and outstanding, respectively (Note 5)             |   |   | 10 |   |   |   | 10 |   |
| Series B Preferred stock, par value $0.0001 per share, 400,000 shares authorized; 375,000 and 362,500 shares issued and outstanding, respectively (Note 5) |   |   | 37 |   |   |   | 36 |   |
| Common stock, par value $0.0001 per share, 500,000,000 shares authorized; 130,106,113 and 126,086,967 shares issued and outstanding, respectively (Note 5) |   |   | 13,011 |   |   |   | 12,609 |   |
| Common stock to be issued, 2,175,000 and 130,885 shares, respectively (Note 5)                                                                                  |   |   | 284,000 |   |   |   | 19,633 |   |
| Common stock warrants to be issued, 1,500,000 and zero stock warrants, respectively (Note 5)                                                               |   |   | 131,961 |   |   |   | - |   |
| Deferred stock compensation (Note 5)                                                                                                                            |   |   | (165,000 | ) |   |   | - |   |
| Additional paid-in-capital                                                                                                                                      |   |   | 7,508,524 |   |   |   | 6,778,430 |   |
| Accumulated deficit                                                                                                                                             |   |   | (7,785,265 | ) |   |   | (4,701,847 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Total Stockholders' Equity                                                                                                                                      |   |   | (12,722 | ) |   |   | 2,108,871 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                      |   | $ | 2,334,799 |   |   | $ | 3,704,868 |   |

----

| COPSYNC, INC.                                        |   |
|------------------------------------------------------|--------|
|  Statements of Operations                       |   |
|                                                 |   |   |   |   |   |   |
|                                                 |   | For the Years Ended |   |
|                                                 |   | December 31, |   |
|                                                 |   | 2010 |   |   | 2009 |   |
|                                                 |   |   |   |   |   |   |
| REVENUES                                             |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |
| Hardware, installation and other revenues            |   | $ | 2,029,973 |   |   | $ | 181,695 |   |
| License fee revenues                                 |   |   | 379,314 |   |   |   | 96,323 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Total Revenues                                       |   |   | 2,409,287 |   |   |   | 278,018 |   |
|                                                 |   |   |   |   |   |   |   |   |
| COST OF REVENUES                                     |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |
| Hardware and other costs                             |   |   | 1,971,676 |   |   |   | 539,195 |   |
| Amortization of capitalized licensing costs (Note 2) |   |   | 177,621 |   |   |   | 156,562 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Total Cost of Revenues                               |   |   | 2,149,297 |   |   |   | 695,757 |   |
|                                                 |   |   |   |   |   |   |   |   |
| GROSS PROFIT (LOSS)                                  |   |   | 259,990 |   |   |   | (417,739 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                   |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |
| Depreciation and amortization                        |   |   | 39,084 |   |   |   | 31,103 |   |
| Professional fees                                    |   |   | 1,020,157 |   |   |   | 645,495 |   |
| Salaries and wages                                   |   |   | 1,377,334 |   |   |   | 814,169 |   |
| Rent (Note 10)                                       |   |   | 28,280 |   |   |   | 31,475 |   |
| Other general and administrative                     |   |   | 382,837 |   |   |   | 255,974 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Total Operating Expenses                             |   |   | 2,847,692 |   |   |   | 1,778,216 |   |
|                                                 |   |   |   |   |   |   |   |   |
| LOSS BEFORE OTHER INCOME (EXPENSE)                   |   |   | (2,587,702 | ) |   |   | (2,195,955 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                               |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |
| Interest income                                      |   |   | 5,773 |   |   |   | 2,811 |   |
| Induced conversion expense (Note 5)                  |   |   | (4,346 | ) |   |   | (106,692 | ) |
| Gain on asset disposals                              |   |   | 648 |   |   |   | - |   |
| Gain on settlement of debt                           |   |   | 392,914 |   |   |   | - |   |
| Impairment on capitalized software                   |   |   | (580,000 | ) |   |   | - |   |
| Impairment on investment                             |   |   | (50,000 | ) |   |   | - |   |
| Interest expense                                     |   |   | (68,060 | ) |   |   | (284,281 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| Total Other Income (Expense)                         |   |   | (303,071 | ) |   |   | (388,162 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| NET LOSS BEFORE INCOME TAXES                         |   |   | (2,890,773 | ) |   |   | (2,584,117 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| INCOME TAXES (Note 2)                                |   |   | - |   |   |   | - |   |
|                                                 |   |   |   |   |   |   |   |   |
| NET LOSS                                             |   | $ | (2,890,773 | ) |   | $ | (2,584,117 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| Series B preferred stock dividend                    |   |   | (104,886 | ) |   |   | (21,690 | ) |
| Beneficial conversion feature on Series B preferred  |   |   | (87,759 | ) |   |   | (453,224 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| NET LOSS APPLICABLE TO COMMON SHAREHOLDERS           |   | $ | (3,083,418 | ) |   | $ | (3,059,031 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| LOSS PER COMMON SHARE - BASIC & DILUTED          |   | $ | (0.02 | ) |   | $ | (0.03 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |   |   | 127,911,302 |   |   |   | 121,494,343 |   |

----

| COPSYNC, INC                                                                                                                                                                            |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity                                                                                                                                                      |   |
| For the Period January 1, 2009 through December 31, 2010                                                                                                                                |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   | Stock |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Stock |   |   | Warrants |   |   | Deferred |   |   | Additional |   |   |   |   |
|                                                                                                                                                                                    |   | Preferred Stock A |   |   | Preferred Stock B |   |   | CommonStock |   |   | To Be |   |   | To Be |   |   | Stock |   |   | Paid-in |   |   | Accumulated |   |
|                                                                                                                                                                                    |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Issued |   |   | Compensation |   |   | Capital |   |   | Deficit |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                                                                                                                                                |   |   | 100,000 |   |   | $ | 10 |   |   |   | - |   |   | $ | - |   |   |   | 120,273,001 |   |   | $ | 12,027 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 3,527,549 |   |   | $ | (1,642,816 | ) |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification for contingent liability (Note 9)                                                                                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (200,000 | ) |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial conversion feature on convertible notes payable (Note 4)                                                                                                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 260,000 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Valuation of 875,000 warrants granted to two separate advisory firms (Note 6)                                                                                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 295,858 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for services at $0.58 per share                                                                                                                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 50,000 |   |   |   | 5 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 28,995 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash at prices ranging from $0.10 to $0.20 per share                                                                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,963,334 |   |   |   | 397 |   |   |   | 19,633 |   |   |   | - |   |   |   | - |   |   |   | 464,598 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred shares and warrants issued for cash at $4.00 per unit, along with the valuation of warrants granted and beneficial conversion feater on preferred shares issued |   |   | - |   |   |   | - |   |   |   | 362,500 |   |   |   | 36 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,972,914 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion of beneficial conversion feature on Series B preferred shares to be recognized in a future                                                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (69,726 | ) |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in conversion of notes payable at $0.10 per share, including induced conversion expense                                                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,667,300 |   |   |   | 267 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 373,155 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock cancelled                                                                                                                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,000,000 | ) |   |   | (100 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 100 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in lieu of accrued expenses at $0.30 per share                                                                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 133,332 |   |   |   | 13 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 39,987 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional capital contributed through services rendered                                                                                                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 85,000 |   |   |   | - |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred stock  - cumulative dividends                                                                                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (21,690 | ) |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred stock - deemed dividends from accretion of Preferred discounts                                                                                                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (453,224 | ) |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2009                                                                                                                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,584,117 | ) |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                                                                                                              |   |   | 100,000 |   |   | $ | 10 |   |   |   | 362,500 |   |   | $ | 36 |   |   |   | 126,086,967 |   |   | $ | 12,609 |   |   | $ | 19,633 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,778,430 |   |   | $ | (4,701,847 | ) |

----

| COPSYNC, INC                                                                                                                                                                                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity (Continued)                                                                                                                                                |   |
| For the Period January 1, 2009 through December 31, 2010                                                                                                                                      |   |
|                                                                                                                                                                                          |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   | Stock |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Stock |   |   | Warrants |   |   | Deferred |   |   | Additional |   |   |   |   |
|                                                                                                                                                                                          |   | Preferred Stock A |   |   | Preferred Stock B |   |   | Common Stock |   | To Be |   |   | To Be |   |   | Stock |   |   | Paid-in |   |   | Accumulated |   |
|                                                                                                                                                                                          |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Issued |   |   | Compensation |   |   | Capital |   |   | Deficit |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                                                                                                                    |   |   | 100,000 |   |   | $ | 10 |   |   |   | 362,500 |   |   | $ | 36 |   |   |   | 126,086,967 |   |   | $ | 12,609 |   |   | $ | 19,633 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,778,430 |   |   | $ | (4,701,847 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred shares and warrants issued for cash at $4.00 per unit, along with the valuation of warrants granted and beneficial conversion feature on preferred shares issued |   |   | - |   |   |   | - |   |   |   | 12,500 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 68,032 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued to employees for services rendered at prices ranging from $0.08 to $0.14 per share                                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,179,601 |   |   |   | 118 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 129,214 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash at $0.10 per share                                                                                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,500,000 |   |   |   | 250 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 249,750 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash received during 2009 at $0.15 per share                                                                                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 130,885 |   |   |   | 13 |   |   |   | (19,633 | ) |   |   | - |   |   |   | - |   |   |   | 19,620 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in conversion of notes payable and accrued interest at $0.10 per share, including induced conversion expense                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 108,660 |   |   |   | 11 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,201 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued pursuant to a settlement agreement at $0.10 per share (Note 9)                                                                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 100,000 |   |   |   | 10 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,990 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional capital contributed through services rendered                                                                                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 82,250 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to be issued per an agreement with an advisory firm at $0.60 per share (Note 9)                                                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 45,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to be issued to the Company's CEO from shares of common stock transferred back to the Company from one of the Company's founders at $0.09 per share (Note 5)                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 180,000 |   |   |   | - |   |   |   | (165,000 | ) |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to be issued to a former employee at $0.09 per share (Note 5)                                                                                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock deposits received for common stock to be issued (Note 5)                                                                                                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 50,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Valuation of common stock warrants to be issued (Note 9)                                                                                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 131,961 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Valuation of the vested portion of employee stock options granted during December 2009                                                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 73,854 |   |   |   | - |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal                                                                                                                                                                                      |   |   | 100,000 |   |   | $ | 10 |   |   |   | 375,000 |   |   | $ | 37 |   |   |   | 130,106,113 |   |   | $ | 13,011 |   |   | $ | 284,000 |   |   | $ | 131,961 |   |   | $ | (165,000 | ) |   | $ | 7,426,341 |   |   | $ | (4,701,847 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| COPSYNC, INC                                                                      |   |
|-----------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity (Continued)                                    |   |
| For the Period January 1, 2009 through December 31, 2010                          |   |
|                                                                              |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   | Stock |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Stock |   |   | Warrants |   |   | Deferred |   |   | Additional |   |   |   |   |
|                                                                              |   | Preferred Stock A |   |   | Preferred Stock B |   |   | Common Stock |   |   | To Be |   |   | To Be |   |   | Stock |   |   | Paid-in |   |   | Accumulated |   |
|                                                                              |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Issued |   |   | Compensation |   |   | Capital |   |   | Deficit |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance forward                                                                   |   |   | 100,000 |   |   | $ | 10 |   |   |   | 375,000 |   |   | $ | 37 |   |   |   | 130,106,113 |   |   | $ | 13,011 |   |   | $ | 284,000 |   |   | $ | 131,961 |   |   | $ | (165,000 | ) |   | $ | 7,426,341 |   |   | $ | (4,701,847 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred stock - deemed dividends from accretion of Preferred discounts |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | 69,726 |   |   |   | (87,759 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Valuation of warrants granted to a consulting firm during 2010                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12,457 |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred stock  - cumulative dividends                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (104,886 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2010                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,890,773 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                                        |   |   | 100,000 |   |   | $ | 10 |   |   |   | 375,000 |   |   | $ | 37 |   |   |   | 130,106,113 |   |   | $ | 13,011 |   |   | $ | 284,000 |   |   | $ | 131,961 |   |   | $ | (165,000 | ) |   | $ | 7,508,524 |   |   | $ | (7,785,265 | ) |

----

| COPSYNC, INC.                                                                    |   |
|----------------------------------------------------------------------------------|--------|
| Statements of Cash Flows                                                         |   |
|                                                                             |   |   |   |   |   |   |
|                                                                             |   | For the Years Ended |   |
|                                                                             |   | December 31, |   |
|                                                                             |   | 2010 |   |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                             |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |
| Net loss                                                                         |   | $ | (2,890,773 | ) |   | $ | (2,584,117 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                    |   |   | 216,705 |   |   |   | 187,665 |   |
| Beneficial conversion feature                                                    |   |   | - |   |   |   | 213,959 |   |
| Amortization of note discount                                                    |   |   | 31,452 |   |   |   | - |   |
| Induced conversion expense                                                       |   |   | 4,346 |   |   |   | 106,692 |   |
| Additional expense for granting of warrants and options                          |   |   | 218,272 |   |   |   | 295,858 |   |
| Common stock to be issued for services rendered                                  |   |   | 69,000 |   |   |   | - |   |
| Issuance of common stock for services rendered                                   |   |   | 12,666 |   |   |   | 29,000 |   |
| Capital contributed through services rendered                                    |   |   | 82,250 |   |   |   | 85,000 |   |
| Gain on settlement of debt                                                       |   |   | (392,914 | ) |   |   | - |   |
| Gain on asset disposals                                                          |   |   | (648 | ) |   |   | - |   |
| Impairment of capitalized software                                               |   |   | 580,000 |   |   |   | - |   |
| Impairment of investment                                                         |   |   | 50,000 |   |   |   | - |   |
| Change in operating assets and liabilities:                                      |   |   |   |   |   |   |   |   |
| Accounts receivable                                                              |   |   | (108,568 | ) |   |   | (40,371 | ) |
| Debt issuance costs                                                              |   |   | 12,500 |   |   |   | (16,708 | ) |
| Prepaid expenses                                                                 |   |   | (7,929 | ) |   |   | (14,972 | ) |
| Deposits                                                                         |   |   | 750 |   |   |   | - |   |
| Deferred revenues                                                                |   |   | 587,171 |   |   |   | 533,293 |   |
| Accounts payable and accrued expenses                                            |   |   | 480,138 |   |   |   | 287,869 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Net Cash Used in Operating Activities                                            |   |   | (1,055,582 | ) |   |   | (916,832 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                             |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Software development costs                                                       |   |   | (158,142 | ) |   |   | (374,641 | ) |
| Investments purchased                                                            |   |   | - |   |   |   | (50,000 | ) |
| Purchases of property and equipment                                              |   |   | (19,172 | ) |   |   | (12,737 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Net Cash Used in Investing Activities                                            |   |   | (177,314 | ) |   |   | (437,378 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                             |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Issuance of common stock for cash, net of offering costs                    |   |   | 250,001 |   |   |   | 464,995 |   |
| Payments on notes payable                                                        |   |   | (18,485 | ) |   |   | (10,262 | ) |
| Proceeds received on notes and convertible notes                                 |   |   | - |   |   |   | 362,000 |   |
| Issuance of series B preferred shares for cash                                   |   |   | 50,000 |   |   |   | 1,450,000 |   |
| Proceeds from common stock to be issued                                          |   |   | 50,000 |   |   |   | 19,633 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Net Cash Provided by Financing Activities                                        |   |   | 331,516 |   |   |   | 2,286,366 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             |   |   | (901,380 | ) |   |   | 932,156 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   |   |   | 1,141,534 |   |   |   | 209,378 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                         |   | $ | 240,154 |   |   | $ | 1,141,534 |   |
|                                                                             |   |   |   |   |   |   |   |   |

----

| COPSYNC, INC.                                                                            |   |
|------------------------------------------------------------------------------------------|--------|
| Statements of Cash Flows (Continued)                                                     |   |
|                                                                                     |   | For the Year Ended |   |
|                                                                                     |   | December 31, |   |
|                                                                                     |   | 2010 |   |   | 2009 |   |
| SUPPLEMENTAL DISCLOSURES:                                                                |   |   |   |   |   |   |
|                                                                                     |   |   |   |   |   |   |
| Cash paid for interest                                                                   |   | $ | 4,181 |   |   | $ | 3,414 |   |
| Cash paid for taxes                                                                      |   | $ | - |   |   | $ | - |   |
|                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES:                                             |   |   |   |   |   |   |   |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Purchase of fleet vehicles financed by notes payable                                     |   | $ | 73,687 |   |   | $ | 24,500 |   |
| Common stock issued in lieu of notes payable                                             |   | $ | - |   |   | $ | - |   |
| Common stock issued in lieu of accrued expenses                                          |   | $ | 126,665 |   |   | $ | 40,000 |   |
|  Common stock issued in conversion of notes payable  and accrued interest |   | $ | 10,866 |   |   | $ | 266,730 |   |
| Series B Preferred stock dividends declared                                              |   | $ | 192,645 |   |   | $ | 474,914 |   |
| Financing of Insurance Policy                                                            |   | $ | 23,120 |   |   | $ | - |   |
|                                                                                     |   |   |   |   |   |   |   |   |

----

NOTE 1 -       NATURE OF ORGANIZATION

|  Computer hardware            |  3 years      |   |
|------------------------------------|--------------------|--------|
|  Computer software       |  3 years      |   |
|  Fleet vehicles          |  5 years      |   |
|  Furniture and fixtures  |  5 to 7 years |   |

----

|                                         |   | December 31, |      |
|----------------------------------------------|--------|--------------|-----------|
|                                         |   | 2010         |      |   | 2009 |   |
|  Capitalized software development costs |   | $            | 2,724,082 |   |   | $ | 2,565,940 |   |
|  Accumulated amortization               |   |         | (398,186  | ) |   |   | (220,565 | ) |
|  Sub-total                              |   |         | 2,325,896 |   |   | $ | 2,345,375 |   |
|  Impairment charge                      |   |         | (580,000  | ) |   |   | - |   |
|  Total                                  |   | $            | 1,745,896 |   |   | $ | 2,345,375 |   |

----

----

|   | ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of ASC 740, the Company performed a review of its material tax positions in accordance with and measurement standards established by ASC 740. At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized. There has been no significant change in the unrecognized tax benefit during the years ended December 31, 2010 and 2009.  The Company also estimates that the unrecognized tax benefit will not change significantly within the next twelve months. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | There are no tax positions included in the accompanying financial statements at December 31, 2010 and 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As the Company has significant net operating loss carry forwards, even if certain of the Company’s tax positions were disallowed, it is not foreseen that the Company would have to pay any taxes in the near future.  Consequently, the Company does not calculate the impact of interest or penalties on amounts that might be disallowed. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company files income tax returns in the U.S. federal and Texas jurisdictions.  Tax years 2009 to current remain open to examination by U.S. federal and state tax authorities. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A reconciliation of the beginning and ending accrual for uncertain tax positions is as follows: |
|--------|-------------------------------------------------------------------------------------------------|

|                                                                                                    |   | Year Ended December 31, |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                    |   | 2010                    |   |   | 2009 |   |
|                                                                                                    |   |                    |   |   |   |   |
|  Balance, beginning of year                                                                        |   | $                       | -      |   |   | $ | - |   |
|            Decrease in tax positions for prior years  |   |                    | -      |   |   |   | - |   |
|            Increase in tax positions for prior years  |   |                    | -      |   |   |   | - |   |
|            Increase in tax positions for current year |   |                    | -      |   |   |   | - |   |
|            Settlements                                |   |                    | -      |   |   |   | - |   |
|            Lapse in statute of limitations            |   |                    | -      |   |   |   | - |   |
|                                                                                                    |   |                    |   |   |   |   |   |   |
|  Balance, end of year                                                                              |   | $                       | -      |   |   | $ | - |   |

|                                   |   | December 31, |       |
|----------------------------------------|--------|--------------|------------|
|                                   |   | 2010         |       |   | 2009 |   |
|  Deferred tax asset:              |   |         |       |   |   |   |
|  Net operating loss carryforwards |   | $            | 1,485,800  |   |   | $ | 685,400 |   |
|  Valuation allowance              |   |         | (1,485,800 | ) |   |   | (685,400 | ) |
|  Total                            |   | $            | -          |   |   | $ | - |   |

----

|                                |   | 2010   |     |   | 2009   |   |
|-------------------------------------|--------|--------|----------|--------|--------|--------|
|                                |   |   |     |   |   |   |
|  Book income (loss)            |   | $      | (982,900 | )      |   | $      | (878,600 | ) |
|  Stock for expenses            |   |   | 68,400   |   |   |   | 23,500 |   |
|  Option and warrant expenses   |   |   | 74,200   |   |   |   | 100,600 |   |
|  Other                         |   |   | 40,100   |   |   |   | 166,300 |   |
|  Change in valuation allowance |   |   | 800,300  |   |   |   | 588,200 |   |
|                                |   |   |     |   |   |   |   |   |
|                                |   | $      | -        |   |   | $      | - |   |

|                                               |   | December 31, |     |
|----------------------------------------------------|--------|--------------|----------|
|                                               |   | 2010         |     |   | 2009 |   |
|  Current income tax expense (benefit):        |   |         |     |   |   |   |
|  Federal                                      |   | $            | -        |   |   | $ | - |   |
|  State                                        |   |         | -        |   |   |   | - |   |
|  Current tax expense                          |   | $            | -        |   |   | $ | - |   |
|                                               |   |         |     |   |   |   |   |   |
|                                               |   |         |     |   |   |   |   |   |
|  Deferred tax expense (benefit) arising from: |   |         |     |   |   |   |   |   |
|  Valuation allowance                          |   | $            | (272,100 | ) |   | $ | (200,000 | ) |
|  Net operating loss carryfoward               |   |         | 272,100  |   |   |   | 200,000 |   |
|                                               |   |         |     |   |   |   |   |   |
|  Income tax provision                         |   | $            | -        |   |   | $ | - |   |

----

|                                                                                |   | For the Years Ended December 31, |        |
|-------------------------------------------------------------------------------------|--------|----------------------------------|-------------|
|                                                                                |   | 2010                             |        |   | 2009 |   |
|                                                                                |   |                             |        |   |   |   |
|  Net (loss) available to common shareholders                                   |   | $                                | (2,890,773  | ) |   | $ | (2,584,117 | ) |
|                                                                                |   |                             |        |   |   |   |   |   |
|  Series B Preferred stock dividends and beneficial conversion feature recorded |   |                             | (192,645    | )  |   |   | (474,914 | ) |
|                                                                                |   |                             |        |   |   |   |   |   |
|                                                                                |   | $                                | (3,083,418  | ) |   | $ | (3,059,031 | ) |
|                                                                                |   |                             |        |   |   |   |   |   |
|  Weighted average shares                                                       |   |                             | 127,911,302 |   |   |   | 121,491,343 |   |
|                                                                                |   |                             |        |   |   |   |   |   |
|  Basic and fully diluted loss per share (based on weighted average shares)     |   | $                                | (0.02       | ) |   | $ | (0.03 | ) |

|   | This new guidance is effective for fiscal years beginning on or after June 15, 2010. Earlier adoption is permitted. The Company adopted this new standard during the year ended December 31, 2009. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                       |   |                               |    |   | Fair Value Measurements at December 31, 2010 Using Fair Value Hierarchy |   |
|----------------------------|--------|------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|
|                       |   | Fair Value As of December 31, 2010 |    |   | Level 1                                                                 |   |   | Level 2 |   |   | Level 3 |   |
|                       |   |                               |    |   |                                                                    |   |   |   |   |   |   |   |
|  Investment in LLC    |   | $                                  | 50,000  |   |                                                                    | $      | - |   |   | $ | - |   |   | $ | 50,000 |   |
|  Valuation Allowance  |   | $                                  | (50,000 | )      |                                                                    | $      | - |   |   | $ | - |   |   | $ | (50,000 | )  |
|                       |   |                               |    |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |
|  Net Investment Value |   | $                                  | -       |   |                                                                    | $      | - |   |   | $ | - |   |   | $ | - |   |

----

|                        |   |                |   |   |          |   |   |             |   |           |   | December 31,    |            |
|-----------------------------|--------|---------------------|--------|--------|---------------|--------|--------|------------------|--------|----------------|--------|-----------------|-----------------|
|  Type                  |   | Collateral (If any) |   |   | Interest Rate |   |   | Monthly Payments |   |  Maturity |   | 2010            |            |   | 2009 |   |
|                        |   |                |   |   |          |   |   |             |   |           |   |            |            |   |   |   |
|  Bank                  |   | Autos               |   |   |          | 6.75   | %      |             | $      | 482            |   |  Apr. 2014 |            | $ | 17,231 |   |   | $ | 21,690 |   |
|  Bank                  |   | Autos               |   |   |          | 8.25   | %      |             | $      | 811            |   |  Nov. 2012 |            |   | 17,176 |   |   |   | 24,594 |   |
|  Bank                  |   | Autos               |   |   |          | 6.75   | %      |             | $      | 308            |   |  Sep. 2013 |            |   | 9,239 |   |   |   | - |   |
|  Bank                  |   | Autos               |   |   |          | 6.75   | %      |             | $      | 562            |   |  Oct. 2015 |            |   | 27.699 |   |   |   | - |   |
|  Bank                  |   | Autos               |   |   |          | 7.00   | %      |             | $      | 799            |   |  Nov. 2014 |            |   | 32,708 |   |   |   | - |   |
|  Insurance             |   |                | -      |   |          |   | 5.30   | %                |   | $              | 2,626  |            |  Sep. 2011 |   |   | 20,552 |   |   |   | - |   |
|  Settlement            |   |                | -      |   |          |   | 0.00   | %                |   | $              | 10,000 |            |  Mar. 2012 |   |   | 130,000 |   |   |   | - |   |
|  Total notes payable   |   |                |   |   |          |   |   |             |   |           |   |            |            |   | $ | 254,605 |   |   | $ | 46,284 |   |
|  Less: Current portion |   |                |   |   |          |   |   |             |   |           |   |            |            |   |   | (149,621 | ) |   |   | (12,551 | ) |
|  Long-term portion     |   |                |   |   |          |   |   |             |   |           |   |            |            |   | $ | 104,984 |   |   | $ | 33,733 |   |

|  2012                  |   | $      | 60,454  |   |
|-----------------------------|--------|--------|---------|--------|
|  2013                  |   |   | 22,544  |   |
|  2014                  |   |   | 16,535  |   |
|  2015 & thereafter |   |   | 5,451   |   |
|  Total                 |   | $      | 104,984 |   |

----

|                                                    |   | December 31, |    |
|---------------------------------------------------------|--------|--------------|---------|
|                                                    |   | 2010         |    |   | 2009 |   |
|                                                    |   |         |    |   |   |   |
|  Total convertible notes payable                   |   | $            | 50,000  |   |   | $ | 532,000 |   |
|  Less; unamortized note discount                   |   | $            | (14,589 | ) |   | $ | (46,041 | ) |
|                                                    |   |         |    |   |   |   |   |   |
|  Convertible notes payable, net                    |   | $            | 35,411  |   |   | $ | 485,959 |   |
|  Less: current portion                             |   | $            | (6,249  | ) |   | $ | (472,000 | ) |
|                                                    |   |         |    |   |   |   |   |   |
|  Convertible notes payable, net, long-term portion |   | $            | 29,162  |   |   | $ | 13,959 |   |

----

----

----

----

----

|  Risk-free interest rate   |   |                  | 1.76% - 2.85 | % |
|---------------------------------|--------|-----------------------|--------------|---|
|  Expected life             |   | 36 months - 60 months |         |
|  Expected volatility  |   |                  | 232% - 244   | % |
|  Dividend yield       |   |                  | 0.0          | % |

|                                 |   | Shares |        |   | Weighted Average Exercise Price |   |
|--------------------------------------|--------|--------|-------------|--------|---------------------------------|--------|
|  Outstanding, January 1, 2009   |   |   | 15,264,800  |   |                            | $      | 0.06 |   |
|                                 |   |   |        |   |                            |   |   |   |
|  Granted                        |   |   | 3,775,000   |   |                            |   | 0.20 |   |
|  Exercised/Expired/Cancelled    |   |   | -           |   |                            |   | n/a |   |
|                                 |   |   |        |   |                            |   |   |   |
|  Exercisable, December 31, 2009 |   |   | 19,039,800  |   |                            | $      | 0.10 |   |
|                                 |   |   |        |   |                            |   |   |   |
|  Granted                        |   |   | 350,000     |   |                            |   | 0.20 |   |
|  Exercised/Expired/Cancelled    |   |   | (15,264,800 | )      |                            |   | 0.06 |   |
|                                 |   |   |        |   |                            |   |   |   |
|  Outstanding, December 31, 2010 |   |   | 4,125,000   |   |                            | $      | 0.20 |   |
|                                 |   |   |        |   |                            |   |   |   |
|  Exercisable, December 31, 2010 |   |   | 4,125,000   |   |                            | $      | 0.20 |   |

|            |        |   | Outstanding                                     |   |      | Exercisable                          |   |
|-----------------|-------------|--------|-------------------------------------------------|--------|-----------|--------------------------------------|--------|
| Exercise Prices |        |   | Weighted Average Number Outstanding at 12/31/10 |   |      | Remaining Contractual Life (in yrs.) |   |   | Weighted Average Exercise Price |   |   | Number Exercisable at 12/31/10 |   |   | Weighted Avenue Exercise Price |   |
| $               | 0.20        |   |                                            |   | 3,000,000 |                                 |   |   | 0.79 |   |   | $ | 0.20 |   |   |   | 3,000,000 |   |   | $ | 0.20 |   |
|            | 0.20        |   |                                            |   | 425,000   |                                 |   |   | 3.17 |   |   |   | 0.20 |   |   |   | 425,000 |   |   |   | 0.20 |   |
|            | 0.20        |   |                                            |   | 400,000   |                                 |   |   | 1.46 |   |   |   | 0.20 |   |   |   | 400,000 |   |   |   | 0.20 |   |
|            | 0.10        |   |                                            |   | 50,000    |                                 |   |   | 3.43 |   |   |   | 0.10 |   |   |   | 50,000 |   |   |   | 0.10 |   |
|            | 0.20        |   |                                            |   | 250,000   |                                 |   |   | 0.43 |   |   |   | 0.20 |   |   |   | 250,000 |   |   |   | 0.20 |   |
|            |        |   |                                            |   |      |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $               | 0.10 - 0.20 |   |                                            |   | 4,125,000 |                                 |   |   | 1.11 |   |   | $ | 0.20 |   |   |   | 4,125,000 |   |   | $ | 0.20 |   |

----

|            |        |   | Outstanding                                     |   |       | Exercisable                          |   |
|-----------------|-------------|--------|-------------------------------------------------|--------|------------|--------------------------------------|--------|
| Exercise Prices |        |   | Weighted Average Number Outstanding at 12/31/09 |   |       | Remaining Contractual Life (in yrs.) |   |   | Weighted Average Exercise Price |   |   | Number Exercisable at 12/31/10 |   |   | Weighted Avenue Exercise Price |   |
| $               | 0.05        |   |                                            |   | 15,000,000 |                                 |   |   | 2.25 |   |   | $ | 0.05 |   |   |   | 15,000,000 |   |   | $ | 0.05 |   |
|            |  0.20  |   |                                            |   | 2,900,000  |                                 |   |   |  1.79 |   |   |   |  0.20 |   |   |   | 2,900,000 |   |   |   |  0.20 |   |
|            | 0.60        |   |                                            |   | 264,800    |                                 |   |   | 0.16 |   |   |   | 0.60 |   |   |   | 264,800 |   |   |   | 0.60 |   |
|            | 0.20        |   |                                            |   | 425,000    |                                 |   |   | 4.17 |   |   |   | 0.20 |   |   |   | 425,000 |   |   |   | 0.20 |   |
|            | 0.20        |   |                                            |   | 400,000    |                                 |   |   | 2.46 |   |   |   | 0.20 |   |   |   | 400,000 |   |   |   | 0. 20 |   |
|            | 0.10        |   |                                            |   | 50,000     |                                 |   |   | 4.43 |   |   |   | 0.10 |   |   |   | 50,000 |   |   |   | 0.10 |   |
|            |        |   |                                            |   |       |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $               | 0.05 - 0.60 |   |                                            |   | 19,039,800 |                                 |   |   | 2.21 |   |   | $ | 0.10 |   |   |   | 19,039,800 |   |   | $ | 0.10 |   |

----

----

|  Risk-free interest rate   |   |              | 1.85% - 2.85 | % |
|---------------------------------|--------|-------------------|--------------|---|
|  Expected life             |   | 3 years - 5 years |         |
|  Expected volatility  |   |              | 164% - 170   | % |
|  Dividend yield       |   |              | 0.0          | % |

|                       |   |   |        |   | Weighted Average |   |
|---------------------------------|--------|--------|-------------|--------|------------------|--------|
|                            |   | Shares |        |   | Exercise Price   |   |
|                            |   |   |        |   |             |   |
| Outstanding, December 31, 2008  |   |   | -           |   |             | $      | - |   |
|                            |   |   |        |   |             |   |   |   |
| Granted                         |   |   | 3,150,000   |   |             |   | 0.09 |   |
| Exercised / Expired / Cancelled |   |   | -           |   |             |   | n/a |   |
|                            |   |   |        |   |             |   |   |   |
| Outstanding, December 31, 2009  |   |   | 3,150,000   |   |             | $      | 0.09 |   |
| Granted                         |   |   | 5,600,000   |   |             |   | 0.09 |   |
| Exercised / Expired / Cancelled |   |   | (1,650,000) |   |             |   | 0.09 |   |
|                            |   |   |        |   |             |   |   |   |
| Outstanding, December 31, 2010  |   |   | 7,100,000   |   |             | $      | 0.09 |   |
|                            |   |   |        |   |             |   |   |   |
| Exercisable, December 31, 2010  |   |   | 665,834     |   |             | $      | 0.09 |   |

----

|     |        |   | Outstanding |   |      | Exercisable    |   |
|----------|-------------|--------|-------------|--------|-----------|----------------|--------|
|     |        |   | Weighted    |   |      |           |   |   |   |   |   |   |   |   |   |   |
|     |        |   | Average     |   |      |           |   |   | Weighted |   |   |   |   |   | Weighted |   |
|     |        |   | Number      |   |      | Remaining      |   |   | Average |   |   | Number |   |   | Average |   |
| Exercise |        |   | Outstanding |   |      | Contractual    |   |   | Exercise |   |   | Exercisable |   |   | Exercise |   |
| Prices   |        |   | at 12/31/10 |   |      | Life (in yrs.) |   |   | Price |   |   | at 12/31/10 |   |   | Price |   |
|     |        |   |        |   |      |           |   |   |   |   |   |   |   |   |   |   |
| $        | 0.09        |   |        |   | 1,950,000 |           |   |   | 3.96 |   |   | $ | 0.09 |   |   |   | 300,000 |   |   | $ | 0.09 |   |
|     | 0.10        |   |        |   | 2,000,000 |           |   |   | 2.57 |   |   |   | 0.10 |   |   |   | 166,667 |   |   |   | 0.10 |   |
|     | 0.08        |   |        |   | 1,250,000 |           |   |   | 2.67 |   |   |   | 0.08 |   |   |   | 104,167 |   |   |   | 0.08 |   |
|     | 0.08        |   |        |   | 1,900,000 |           |   |   | 4.75 |   |   |   | 0.08 |   |   |   | 95,000 |   |   |   | 0.08 |   |
|     |        |   |        |   |      |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $        | 0.08 - 0.10 |   |        |   | 7,100,000 |           |   |   | 3.55 |   |   | $ | 0.09 |   |   |   | 665,834 |   |   | $ | 0.09 |   |

----

----

----

| 1)   | In October 2009, Rocket City Enterprises, Inc. (“RCTY”) filed an arbitration demand against the Company.  The demand alleged breach of contract and sought repayment of a purported loan in the amount of $200,000 plus interest at 9% per annum.  In November 2010, the two parties settled the matter.  Pursuant to the settlement, the Company agreed to pay RCTY an aggregate amount of $130,000, $20,000 of which was paid in early April, 2011 and $10,000 is to be paid each succeeding calendar month until fully paid.  These payments shall not bear interest.  As additional consideration in the settlement of the arbitration proceeding, COPsync delivered 100,000 shares of its common stock to RCTY valued at $10,000. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | In 2009, the Company filed a lawsuit against an individual who held convertible notes payable of the Company in the principal amount of $472,000 and various entities we believed to be affiliated with that individual, as described in our previous filings with the SEC.  In June 2010, we entered into a “deal points” settlement with the opposing parties.  The agreement is an enforceable contract, but contemplates that a full settlement agreement, with mutual releases, will be executed.  The parties are still negotiating the terms of the definitive settlement agreement.  In pertinent part, the deal points settlement agreement provides that : (i) if we complete financing with a party introduced to us by the principal defendant or another identified individual, we will pay 45% of the funds raised pursuant to such financing toward the principal and accrued interest allegedly owed under the purported $472,000 principal amount loans described above; otherwise, these purported loans are discharged; (ii) we will issue to one of the defendants one million unrestricted shares of our common stock in exchange for purported warrants to purchase 15 million shares of our common stock; (iv) we will issue an additional one million restricted shares of our common stock to another defendant; and (v) all parties will release all claims and counterclaims with prejudice. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1)   | In March 2011, the Company executed a sub-lease agreement for office space (approximately 6,000 square feet) in Dallas, Texas.  The new facility will become the Company’s headquarters location, and the Company’s Canyon Lake location will transition into providing principally research and development, customer support and other operational activities.  The sublease agreement entails a twenty-three month lease arrangement with monthly payments of $7,489 per month, and with rent for the first three months having been waived. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | As of April 13, 2011, the Company had obtained written subscriptions for new capital approximating $1,220,000.  The investment options were (1) an equity transaction, consisting of shares of the Company’s common stock and accompanying warrants and/or (2) a convertible note.  The split between those investors subscribing for an equity versus a convertible note transaction is $618,000 and $602,000, respectively.  Cash proceeds from both investment options of approximately $816,000 had been collected as of April 13, 2011. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | The details of the equity transaction are as follows:  An equity unit shall consist of five shares of the Company’s common stock and one warrant, and the purchase price is $0.50 per unit ($0.10 per share of common stock).  The exercise price of the warrants is $0.20 per share of common stock and the warrants will expire March 31, 2015. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | The terms of the convertible notes are as follows:   The notes are due and payable on March 31, 2014.  The notes bear annual simple interest of three percent.  The first interest payment shall be due on January 2, 2012 and shall be paid quarterly thereafter.  The notes may be converted at the holder’s option into shares of the Company’s common stock at a conversation rate of $0.10 per share. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|