UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549


FORM 10-K





x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31, 2009


or ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from ______ to ______





Commission
file number: 000-52490





BEYOND
COMMERCE, INC.


(Exact
name of registrant as specified in its charter)




Nevada
            98-0512515(State
      of incorporation or organization)
            (I.R.S.
      Employer Identification No.)





9029
South Pecos


Suite
2800


Henderson,
Nevada 89074


(Address
of principal executive offices, including zip code)





(702)
463-7000


(Registrant’s
telephone number, including area code)


Securities
Registered Pursuant To Section 12 (b) Of The Act


Title
of each class





NONE


Securities
Registered Pursuant To Section 12 (g) Of The Act:


Common
Stock $0.001 Par Value





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  ̈ Yes  x No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.     ̈ Yes  x No





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


Yes
xNo  ̈





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





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





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





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





As of
June 30, 2009, the aggregate market value of the registrant's common stock
held by non-affiliates (assuming for the sole purpose of this calculation, that
all directors and officers of the registrant are "affiliates") was $9,970,857
(based on the closing sale price of the registrant's common stock as reported on
the OTCBB). The number of shares of common stock outstanding at that date was
45,186,179 shares.





As of
April 19, 2010 there were outstanding 59,493,311 of the registrant’s common
stock.







BEYOND
COMMERCE, INC.


FORM
10-K FOR THE YEAR ENDED


December
31, 2009




Table of
Contents




PART
      I
                
                3ITEM
      1.
                DESCRIPTION
      OF BUSINESS
                3ITEM
      1A.
                RISK
      FACTORS.
                8ITEM
      1B.
                UNRESOLVED
      STAFF COMMENTS.
                16ITEM
      2.
                DESCRIPTION
      OF PROPERTY
                16ITEM
      3.
                LEGAL
      PROCEEDINGS
                17ITEM
      4.
                RESERVED
                17PART
      II
                
                17ITEM
      5.
                MARKET
      FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
      EQUITY SECURITIES.
                17ITEM
      6.
                SELECTED
      FINANCIAL DATA.
                18ITEM
      7.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                19ITEM
      7A.
                QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                25ITEM
      8.
                FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                25ITEM
      9.
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                25ITEM
      9A.
                CONTROLS
      AND PROCEDURES
                25ITEM
      9B.
                OTHER
      INFORMATION
                26PART
      III
                
                26ITEM
      10.
                DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
                26ITEM
      11.
                EXECUTIVE
      COMPENSATION
                28ITEM
      12.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                31ITEM
      13.
                CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
                33ITEM
      14.
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                34PART
      IV
                
                34ITEM
      15.
                EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
                34




~ 2
~




Throughout
this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,”
“the Company” and “the Registrant” refer to Beyond Commerce, Inc., a Nevada
corporation formerly known as Boomj, Inc. and Reel Estate Services, Inc., and,
unless the context indicates otherwise, also include our wholly-owned
subsidiaries.  As of the date of this Annual Report, we only have one
wholly-owned subsidiary ( Boomj.com), Inc., a Nevada
corporation).  During the fiscal years covered by this Annual Report,
KaChing KaChing, Inc., a Nevada corporation we formed in the third quarter of
2009,  and LocalAdLink, Inc., a Nevada corporation, whose business we
sold to a third party in October, 2009, were wholly owns
subsidiaries.  Accordingly, the operations of LocalAdLink and KaChing
KaChing are included herein during the periods that those subsidiaries were
operating as our subsidiaries.





“Safe Harbor”
Statement




From time
to time, we make oral and written statements that may constitute
“forward-looking statements” (rather than historical facts) as defined in the
Private Securities Litigation Reform Act of 1995 or by the Securities and
Exchange Commission (the ”SEC”) in its rules, regulations and releases,
including Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We
desire to take advantage of the “safe harbor” provisions in the Private
Securities Litigation Reform Act of 1995 for forward-looking statements made
from time to time, including the forward-looking statements made in this Annual
Report, as well as those made in our other filings with the SEC.




All
statements in this Annual Report, including under the captions “Description of
Business,” “Risk Factors,” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” other than statements of
historical fact are forward-looking statements for purposes of these provisions,
including statements of our current views with respect to our business strategy,
business plan and research and development activities, our future financial
results, and other future events.  These statements include
forward-looking statements both with respect to us, specifically, and the
Internet and on-line e-commerce industries, in general.  In some
cases, forward-looking statements can be identified by the use of terminology
such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,”
“potential” or “could” or the negative thereof or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements contained herein are reasonable, there can be no assurance that such
expectations or any of the forward-looking statements will prove to be correct,
and actual results could differ materially from those projected or assumed in
the forward-looking statements.




All
forward-looking statements involve inherent risks and uncertainties, and there
are or will be important factors that could cause actual results to differ
materially from those indicated in these statements.  If one or more
of these or other risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results may vary materially from what
we anticipate.  Please consider our forward-looking statements in
light of those risks as you read this Annual Report.  We undertake no
obligation to publicly update or review any forward-looking statement, whether
as a result of new information, future developments or otherwise.




PART
I




ITEM 1.
            DESCRIPTION OF
      BUSINESS




Beyond
Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”, and “we”), is an
Internet company that has two interrelated business models aimed at generating
revenues primarily from Web site advertising and E-commerce
transactions. These two business models consist of advertising and
merchandise sales through a social networking website, and E-commerce services
and advertising through E-commerce solutions.





Our
initial business wasBOOMj.com,
Inc. ,www.BOOMj.com , a
niche portal and social networking site for Baby Boomers and Generation
Jones.  Our BOOMj.com Web site provides social, political, financial,
and lifestyle content to the Baby Boomer/Generation Jones target audience as a
platform for our advertising and E-commerce businesses.





During
the second quarter of 2009 we re-launched  i-SUPPLY, www.i-SUPPLY.com,
an online storefront that offers easy to use, fully customizable E-commerce
services, and revenue solutions for any third party Web site large or small, and
hosts local ads, providing extensive reach for our proprietary advertising
partner network platform.


~ 3
~





During
the third quarter of 2009 we formed another subsidiary, KaChing KaChing,
Inc.  This subsidiary is an E-commerce platform that provides a
complete turn-key E-commerce solution. Individual KaChing KaChing on line store
owners have the ability to create, manage and earn money from product sales
generated from their individual Web stores. Until
October 9, 2009, we also operated a website, a local search directory and local
advertising network geo-targeted to local consumers through our LocalAdLink,
Inc. wholly-owned subsidiary.  On October 9, 2009, LocalAdLink Inc.
sold its LocalAdLink Software (the “Software”) and all of their assets related
to the Software including the rights to the name LocalAdLink, the LocalAdLink
trademark, the  Website,   www.LocalAdLink.com  ,
and a local search directory and advertising network that brings local
advertising to geo-targeted consumers.  We will continue to sell
advertising as we had prior to inception of Local Ad Link, Inc., however on a
smaller scale with a greater emphasis on business to business
sales.




History
of the Company




The
Company, formerly known as Reel Estate Services, Inc. (“RES”), was incorporated
in Nevada on January 12, 2006.  As of December 28, 2007, RES was a
public shell company, defined by the Securities and Exchange Commission as an
inactive, publicly quoted company with nominal assets and
liabilities.





In
December 2008, the Company changed its name from BOOMj, Inc. to Beyond Commerce,
Inc. to more accurately reflect the new structure of the Company that included
new operating divisions (i.e. i-SUPPLY and until its assets were sold,
LocalAdLink, Inc.)





On
October 9, 2009, the Company and its wholly-owned, LocalAdLink, Inc. entered
into an asset purchase agreement (the “LocalAdLink Purchase Agreement”) with
OmniReliant Holdings, Inc. (“Omni”), pursuant to which, on October 9, 2009, the
Company and LocalAdLink sold to Omni the assets relating to the LocalAdLink
software, the Web site,www.LocalAdLink.com , and a local search directory and advertising
network that brings local advertising to geo-targeted consumers. The assets sold
under the LocalAdLink Purchase Agreement include the assets relating to the
LocalAdLink source codes, as updated, name rights, the LocalAdLink trademark,
any additional third party codes that have been modified or integrated into the
source codes to enable the business process operations of LocalAdLink, including
but not limited to the domain URL assets, and all creative materials,
advertising and promotional materials, marketing materials, conference
materials, database materials, supplier lists, equipment repair, maintenance or
service records, and all other printed or written materials whether written or
electronically stored or otherwise recorded, as they relate to the foregoing
assets.





The
Company currently maintains its corporate office in Henderson,
Nevada.




Our
Businesses




Our
continuing business operations are (i) i-SUPPLY, and (ii) BOOMj.  As
noted above, on October 9, 2009, we sold the assets relating to the software,
name rights, and trademark of a third division of the Company, LocalAdLink, an
online advertising service that enables local businesses to reach local
customers. The Company will continue to sell advertising as it had prior to
inception of Local Ad Link, Inc., however on a different scale with a greater
emphasis on business to business sales. In particular, the Company will make
sales directly through experienced professional sales representatives rather
than through a multi-level marketing system, and such advertising will continue
to be presented on the Company’s Boomj social network and i-SUPPLY store
network. In addition, through such professional sales representatives, we will
seek to continue to expand sales of our preparatory widget technology, which
allows any Web site that is operated by a third party to use our
online storefront tool to monetize visitors of their Web site by simply
cutting and pasting a few lines of code to instantly create a
online storefront on their site.




During
the third quarter of 2009 the Company started another subsidiary, KaChing
KaChing, Inc. This subsidiary is a progressive e-commerce business dedicated to
offering of an e-commerce solution that provides individual store owners (“Store
Owners”) the ability to create, manage and earn money from product sales
generated from their individual online web stores. KaChing manages all product
selection, on-site merchandising, shipping, returns, refunds, customer service
and pricing. KaChing offers back office dashboard that allows Store Owners to
easily manage their stores and track commissions, basically a complete turn-key
operation. A Store Owner is principally charged with marketing and managing his
website.





i-SUPPLY




Our
i-SUPPLY division specializes in providing state of the art E-commerce tools and
solutions for high traffic Web sites.  The i-SUPPLY widget online
store will allow any Web site that is operated by a third party to use our
online  storefront tool to monetize visitors of their Web site by
simply cutting and pasting a few lines of code to instantly create a
online  storefront on their site. Using the i-SUPPLY tool,
participating Web sites will be able to offer 1.8 million brand name products on
their Web site and will be able to customize the look and feel of their
storefront.  i-SUPPLY creates a value-add to these owners by handling
product selection, pricing, customer support, billing and shipping for any sales
generated by its widget.   In March 2009, we launched the beta
version of the i-SUPPLY store front tool.  The advanced version of the
storefront tool with additional functionality and features was released during
the second quarter of 2009.


~ 4
~




i-SUPPLY
offers E-commerce solutions that combine the best features of today’s hottest
online storefronts with social shopping platforms, offering users
of  i-SUPPLY highly valuable technology, products and information to
monetize their traffic.  For example, a third party site dedicated to
a specific interest (such as photography, gardening, electronics, etc.) can now
use the i-SUPPLY storefront to offer a store on that site that offers thousands
of products related to that interest (such as photo equipment, gardening tools,
or electronic products).  Users of the tool will be able to generate
sales from their Web site without having to set up and operate an online store.
i-Supply has over 4,800 member affiliate agreements and over 2,600
stores. The Company is in the process of creating stores for the member
affiliate agreements that do not yet have corresponding stores. i-SUPPLY is not
dependent on one or more major customers.




The core
of i-SUPPLY is our proprietary Widget store technology. This technology allows
users to instantly create a store that is hosted on their platform by simply
copying and pasting a few lines of code into a blank page on their site. This
means that third party Web sites will retain traffic and be able to record
statistics through our innovative live reporting and sales tools. This unique
service allows any Web site to integrate customizable Web stores with tailored
assortments of products from over 1.8 million brand names. i-SUPPLY’s team
completely manages all backend fulfillment issues following a sale of any of the
products, including shipping, customer service, returns, and
refunds.





i-SUPPLY
provides us with the potential to generate revenue from product sales on third
party Web sites. In addition, the third party storefronts are built with
customized advertising space dedicated to local advertising.  This ad
inventory is filled by our former LocalAdLink division, thereby providing the
Company with the ability to extend its advertising reach to the hundreds of
thousands of Web properties who use the i-SUPPLY platform.




BOOMj.com




The BOOMj
subsidiary operates BOOMj.com, the leading online community for Baby Boomers and
Generation Jones, both born during the big 20-year post-World War II boom in
births from the mid-1940's to mid-1960's.  “Baby Boomer” is a term
used to describe a person who was born between 1942 and 1953, while “Generation
Jones” is a term generally used to describe people born between 1954 and
1965.   Together they consist of almost 80 million people, arguably at
the prime of their lives.





BOOMj.com’s
membership is absolutely free and offers a rich integrated online experience
through easy to use social networking and shopping tools for members to network,
as well as share common interests with others, including their friends, family
and colleagues.  BOOMj.com members will be able to take advantage of
the innovative technologies incorporated from i-SUPPLY, offering over 1.8
Million brand name products at affordable prices.





Currently,
BOOMj.com’s traditional social-networking features include that of creating a
personal and business profile, uploading and sharing images and videos.
Community features include blogs, groups and messaging between friends as well
as the ability to create posts and leave messages on individual profile pages.
The BOOMj Expert Network features over sixty experts in categories ranging from
retirement and financial planning to fitness and health. BOOMj Experts interact
with our community of members by providing advice and insight on these important
and relevant topics. Members are also able to reach out to experts for opinions
and recommendations. BOOMj.com also offers content from respected third parties,
such as Tribune Media, in the areas of current events, health and lifestyle.
This additional news and information offers incremental value to members and
often acts as the starting point for debate and interaction.




As a way
of showing our appreciation to our community and incentivizing interaction, we
award our members with reward points for all of their activity on the site.
Whether they read an article, upload new photos, take a quiz, comment on a blog,
write a product review, and invite friends to join or even respond to a survey,
our members accrue reward points.  These BOOMj Reward Points are redeemable
as discounts towards purchases in the BOOMj store and are a valuable tool for
increasing our brand loyalty.




The BOOMj
store currently offers over 1.8 million brand name products at affordable
prices. The store is available to both our members and the general public and
offers best selling products across major categories including but not limited
to beauty, garden and patio, Books, kitchen, music, camera and photo, office
supplies, computers, pets, consumer electronics, wellness, DVDs and more.
BOOMj.com has registered over 85,000 members since commencing the site. Boomj is
not dependent on one or more major customers.


~ 5
~





KACHING KACHING
INC.





KaChing
is an early-stage business with a limited operating history that launched its
website www.kachingkaching.com in September 2009. KaChing is a progressive
e-commerce company dedicated to offering of an e-commerce solution that provides
individual store owners (“Store Owners”) the ability to create, manage and earn
money from product sales generated from their individual online web stores. This
business model is basically a retail chain of online stores serving consumers on
the Internet. Store product categories include: Books, DVDs, Computers,
Software, Kitchen, Home & Garden, Pet Supplies, Cosmetics & Fragrance,
Health & Wellness, Consumer Electronics, Cameras, Office Supplies and other
items. KaChing manages all product selection, on-site merchandising, shipping,
returns, refunds, customer service and pricing. KaChing offers back office
dashboard that allows Store Owners to easily manage their stores and track
commissions, basically a complete turn-key operation. A Store Owner is
principally charged with marketing and managing his website. In addition, a
Store Owner can, depending on his license, recruit other store owners and
receive a recruiting bonus.





KaChing
leverages today’s social shopping trends by allowing customers to contribute
reviews and ratings on each product sold in the store. These reviews are
aggregated across KaChing storefronts. Our Store Owners can also participate in
the Store Owners community which provides in-depth training, tips and advice on
how to grow their business virally.





Store
Owners subscribe to a monthly license, with 3 levels of membership - $30 / $50 /
$100 per month. Each Store Owner can sell products from its individual website
and earn a commission. Also, as noted above, the Store Owner can sell store
licenses and earn a commission including the potential to earn override
commissions on store licenses sold and may qualify for bonuses based upon
defined performance levels.  Premium membership at $50 and $100 allows
Store Owners to give-away “free” non-member stores and earn a commission on
sales from those stores.





Competition




BOOMj.com
social network has intense competition in the social network and niche community
space.  Many internet users belong to more than one social network and
divide their time between those networks. We expect this competition to continue
to increase as new social networking sites open.  As a result, we face
formidable competition in every aspect of our social networking business, and
particularly from other companies that seek to connect people with information
and entertainment on the Web.  Competitors include Eons.com,
TeeBeeDee.com, AARP.com, Facebook.com, Myspace.com, Boomergirl.com and
Boomer411.com.  In addition, we will continue to compete with large
portals like Yahoo.com, MSN.com, Aol.com and professional social communities
like LinkedIn and Plaxo. We also expect competition from traditional magazine
and newspaper publishers, as they begin to integrate social networking features
into their current digital properties.




BOOMj.com
media and advertisingcompetes for both the
national and local advertisers.  While advertising on the Web
continues to grow, so does the competition for the national and local
advertising dollars.  Large web advertisers, such as Google and Yahoo,
dominate major advertising.  In order to avoid head-to-head
competition with these larger competitors, we are trying to foster both agency
and direct brand relationships while still offering competitive and unique
advertising and sponsorship packages.  In addition, we will also be
competing for advertising revenues with other E-commerce companies, with general
purpose consumer online services such as America Online and Microsoft Network,
with websites that target specific markets in which we also provide content
(such as, for example, business and financial needs that are served by
TheStreet.com and Motley Fool and other web “portal” companies, such as Excite,
Infoseek, Yahoo! and Lycos).





There are
many competitors on the Internet selling similar e-commerce membership programs
and products. We believe the most effective way to be successful against this
competition is a combination of quality products with independent store owners
having exceptional customer service and backend office support. Our experience
tells us that there are many companies selling inferior e-commerce programs and
very few companies willing to truly put their signature on customer service and
back office support.





We
believe that both i-SUPPLY and KaChing KaChing and its Store Owners must compete
against some of the major Internet online websites including Shopping.com and
Amazon.com as they become retail store owners in this sector of the Internet –
E-Commerce. Retail sales on the Internet have grown at a blistering pace of 20%
a year for the past 12 years and now exceeds $150,000,000,000 of annual online
retail sales in the U.S. Marketers are projected to continue to make social
networks a priority for 2010, but a significant portion of their spending will
go toward building and maintaining a social network presence.




~ 6
~


i-SUPPLY
and KaChing Store Owners on the Internet are able to become a real store owner
and buy and sell products directly from manufacturers and wholesalers. This is a
home based business that can be attractive to grow in a full-time or part-time
basis by marketing individual stores on the Internet, to friends and family and
through personal consumption. The business model reflectsa retail chain concept
of online stores serving consumers on the Internet. This revolutionary idea was
created to compete with the brick-and-mortar and e-commerce worlds with the
expert knowledge in retail strategies, sourcing and pricing products, supply
chain distribution. The market consists of billions of dollars in retail
revenues.




We
believe that both i-SUPPLY and KaChing KaChing provide unique value for third
party websites that use our storefront.  However other large
E-commerce platforms, such as Amazon.com and Buy.com may be able to create
similar opportunities.  Our i-SUPPLY and KaChing KaChing product
offering competes against other E-commerce stores and against traditional brick
and mortar retailers that have the advantage of the brand awareness inherent
with their brick and mortar presence.  In today’s economic climate
brick and mortar retailers are expanding their sales outreach, not by adding
physical locations, but by investing in the E-commerce strategy.




Marketing
Strategy




The
i-SUPPLY marketing strategy includes a commerce platform that is available for a
licensing fee to our brand builders. This allows the licensee to create an
unlimited affiliate program with other Web sites to create a store front of
brand name products. The brand builder and the affiliates will share in a
sliding scale commission structure from a minimum of 3% to a maximum of 10%.
Additionally i-SUPPLY will offer other Web partners its E-commerce solution.
This process will allow i-SUPPLY to grow virally throughout the Internet, thus
creating tens of thousands of Web sites carrying the i-SUPPLY E-commerce
solution. The Company also sells advertising on a business to business
basis in which the Boomj and i-SUPPLY platforms are utilized as targeted
advertising networks.




BOOMj
has implemented a variety of results driven and cost effective online and
offline marketing strategies in order to drive brand awareness, customer
generation and retention, and revenue for BOOMj.com.  Such marketing
strategies include e-mail marketing, search engine marketing (both paid search
and search engine optimization), social media marketing, incentive/loyalty
marketing, comparison shopping engine marketing, Expert Network outreach, public
relations, participation in community, not-for-profit and industry related
events. With the transformation of BOOMj.com from a pure social community to a
social commerce community, customer, site traffic and revenue generation will
mainly be driven through the support of the viral marketing efforts of the
i-SUPPLY business property.





Government
Regulation




We are
subject to a number of foreign and domestic laws and regulations that affect
companies conducting business on the Internet, including laws and regulations
relating to user privacy, freedom of expression, content, advertising,
information security and intellectual property rights.  In the U.S.,
laws relating to the liability of providers of online services for activities of
their users and other third parties are currently being tested by a number of
claims, which include actions for defamation, libel, invasion of privacy and
other data protection claims, tort, unlawful activity, copyright or trademark
infringement and other theories based on the nature and content of the materials
searched, the ads posted or the content generated by users. Certain foreign
jurisdictions are also testing the liability of providers of online services for
activities of their users and other third parties. Any court ruling that imposes
liability on providers of online services for activities of their users and
other third parties could harm our business. Likewise, a range of other laws and
new interpretations of existing laws could have an impact on our business. For
example, in the U.S. the Digital Millennium Copyright Act has provisions that
limit, but do not necessarily eliminate, our liability for listing, linking or
hosting third-party content that includes materials that infringe copyrights or
other rights. The costs of compliance with these laws may increase in the future
as a result of changes in interpretation. Furthermore, any failure on our part
to comply with these laws may subject us to significant
liabilities.




Similarly,
the application of existing laws prohibiting, regulating or requiring licenses
for certain businesses of our advertisers, including, for example, online
gambling, distribution of pharmaceuticals, adult content, financial services,
alcohol or firearms, can be unclear. Application of these laws in an
unanticipated manner could expose us to substantial liability and restrict our
ability to deliver services to our users. For example, some French courts have
interpreted French trademark laws in ways that would, if upheld, limit the
ability of competitors to advertise in connection with generic
keywords.




We are
also subject to federal, state and foreign laws regarding privacy and protection
of user data. We post on our Web site our privacy policies and practices
concerning the use and disclosure of user data. Any failure by us to comply with
our posted privacy policies or privacy-related laws and regulations could result
in proceedings against us by governmental authorities or others, which could
potentially harm our business. In addition, the interpretation of data
protection laws, and their application to the Internet, in Europe and other
foreign jurisdictions is unclear and in a state of flux. There is a risk that
these laws may be interpreted and applied in conflicting ways from country to
country and in a manner that is not consistent with our current data protection
practices. Complying with these varying international requirements could cause
us to incur additional costs and to have to change our business practices.
Further, any failure by us to protect our users’ privacy and data could result
in a loss of user confidence in our services and ultimately in a loss of users,
which could adversely affect our business.


~ 7
~




In
addition, because our services are accessible worldwide, certain foreign
jurisdictions may claim that we are required to comply with their laws, even
where we have no local entity, employees or infrastructure.





Intellectual
Property




Our
trademarks, trade secrets, copyrights and other intellectual property rights are
important assets for us. We believe that we own the trademarks to
“boomj,”  “boomj.com,” “iSUPPLY”, “i-SUPPLY.com”, “KaChingKaching.com”
and “Kaching Kaching.”  We intend to register these and possibly other
trademarks. We hold the Internet domain names www.boomj.com, www.boomj.net ,
www.boomj.org, www.beyondcommerce.com, and www.i-SUPPLY.com.  We
also hold the Internet domain names www.myboomj.com, myboomj.net, and
myboomj.org. Under current domain name registration practices, no one else can
obtain an identical domain name, but someone might obtain a similar name, or the
identical name with a different suffix, such as “.org,” or with a country
designation.




EMPLOYEES
AND EMPLOYMENT AGREEMENTS




As of
April 15, 2010 we have 16 full-time employees, including our three executive
officers. None of our employees are represented by a labor union. We have not
experienced any work stoppages and consider our relations with our employees to
be fair as many of these employees have not been paid since the beginning of the
year.




ITEM 1A.
            RISK
    FACTORS.




An
investment in our securities involves a high degree of risk.  You
should carefully consider the risks described below before deciding to invest in
or maintain your investment in our company.  The risks described below
are not intended to be an all-inclusive list of all of the potential risks
relating to an investment in our securities.  If any of the following
or other risks actually occur, our business, financial condition or operating
results and the trading price or value of our securities could be materially and
adversely affected.





Risks
Related to Our Business and Industry




We
have had operating losses since formation and expect to incur net losses for the
near term.




We
reported net losses of $11,656,030 and $13,595,294 for the fiscal years ended
December 31, 2009 and 2008, respectively.  Although we generate
revenues (we generated $1,843,231 in 2008 and $13,953,470 during 2009 from
continuing and discontinued operations), our revenues and gross profits
currently are not sufficient to cover our operating
expenses.  Substantially all of our revenues in 2009 were derived from
our LocalAdLink operations, which we sold in October 2009.  We
anticipate that we will continue to incur net losses in the near term, and we
may never be able to achieve profitability.  In order to achieve
profitable operations we need to significantly increase our revenues from
product sales, store licenses and advertising and reduce operating
expenses.   We cannot be certain that our business will ever be
successful or that we will generate significant revenues and become
profitable.





As
of December 31, 2009, we had a working capital deficit of $13,072,314 and a
negative net worth of $12,476,123, which put our ability to operate in the
future, and our ability to raise additional financing, in jeopardy.





As of
December 31, 2009, we only had $608,149 of current assets, but had $13,680,463
of current liabilities, as a result of which we had a working capital deficit of
$13,072,314. In addition, we had a negative net worth of $12,476,123. Since we
do not have sufficient current assets to pay our current liabilities, our
ability to operate in the future is in jeopardy unless we obtain additional
financing. However, our negative net worth, working capital deficit, and history
of losses will make it difficult to obtain the financing that we will need to
operate in the future. No assurance can be given that we will be able to
continue to operate as planned, or at all.




~ 8
~




We
will need significant additional capital, which we may be unable to
obtain.


We
currently do not have sufficient cash available to fund our working capital
needs.  In addition, we do not generate sufficient cash from
operations to fund our operating expenses, nor do we have any credit facilities
available to us from which we can fund our operating deficits.  Our
capital requirements in connection with our commercial operations have been and
will continue to be significant.  Also, we have to date funded many of
our operating expenses from short-term loans, of which $5,023,322 has already
matured and is in default or is currently in default due to cross-default
provisions and an additional $1,333,333 that will mature during the second
quarter of 2010.  Accordingly, we will need to obtain a significant
amount of additional capital (from operations or from investors) to continue to
fund our operating expenses and to repay our outstanding obligations within the
next 30 days.  However, in order to generate more sales from our
E-commerce stores, we need to obtain additional credit from our vendor credit
lines with the suppliers of the products that we sell.  Because of our
current financial position, we have not received the amount of vendor credit
that we need to generate significant sales from our E-commerce
sales.  Accordingly, we will need to obtain a minimum of approximately
$4,000,000 of funding until revenues increase to continue to finance our
operations and to repay our currently outstanding obligations for the next
twelve months.





We have
not identified the sources for the additional financing that we will require,
and we do not have commitments from any third parties to provide this
financing.  Certain investors may be unwilling to invest in our
securities since we are traded on the OTC Bulletin Board and not on a national
securities exchange, particularly if there is only limited trading in our common
stock on the OTC Bulletin Board at the time we seek financing.  There
is no assurance that sufficient funding through a financing will be available to
us at acceptable terms or at all.  Any additional funding that we
obtain in a financing is likely to reduce the percentage ownership of the
Company held by our existing security-holders.  The amount of this
dilution may be substantially increased if the trading price of our common stock
has declined at the time of any financing from its current
levels.  There can be no assurance that financing will be available in
amounts or on terms acceptable to us, if at all.  If we are unable to
obtain the needed additional funding, we will have to reduce or even totally
discontinue our operations, which would result in a total loss to all of our
equity investors and a significant loss to our promissory note
holders.




Our
independent auditors’ report has included an explanatory paragraph in
its report stating that there is  a substantial doubt about our
ability to continue as a going concern.





Because
we have incurred losses of approximately $11,656,030 and $13,595,294 in 2009 and
2008, respectively and will need to raise additional capital to fund our
operations in 2010, our auditor included in its report for the years ended
December 31, 2009 and 2008, an explanatory paragraph stating that
there is a substantial doubt about our ability to continue as a going concern.
If we continue to generate significant losses we may not be able to continue as
a going concern.




We
currently have outstanding potentially convertible promissory notes that are in
technical default that are secured by a lien on all of this company’s assets.
Accordingly, should the noteholders declare the notes in default, it - could
result in the foreclosure of all of our assets and the termination of our
business.




We
initially issued $4,280,000 (of which $2,210,000 is still outstanding) of
convertible promissory notes that are secured by a first priority security
interest on all of our assets. These notes were scheduled to mature on March 31,
2009.   The holders of those notes had extended the maturity date
of those notes to January 31, 2010.  As a result of this extension,
all $2,210,000 of the notes now mature and in technical default (no holders have
as yet exercised their rights to call the note in default, however they may do
so at any time) and must be repaid in full, both principal and
interest.   The holders of the convertible promissory notes currently
have the right to foreclose on all of our assets, which would materially and
adversely affect our ability to continue our operations and could terminate our
existence. No assurance can be given that we will be able to make all payments
as required or that we will be able to repay the convertible promissory
notes.





We
have a limited operating history upon which an evaluation of our prospects can
be made. For that reason, it is difficult to judge our prospects.




We have a
limited operating history, and as a result investors do not have access to the
same type of information in assessing their proposed investment as would be
available to investors in a company with a more extensive history of prior
operations.  Although we have operated our BOOMj.com Web site for
the past two years, because of our lack of funding we have not been able to
maintain vendor credit lines with the suppliers of our online
products.  As a result, we have not been able to maintain and generate
sales through the online store on our BOOMj.com Web site.  In
addition, our LocalAdLink product was introduced late in the fourth quarter of
2008 (in October 2009, we sold the assets relating to the software, name rights,
and trademark of the LocalAdLink product), and the formal launch of the fully
functional i-SUPPLY online storefront occurred late in the second quarter of
2009.  Accordingly, to date, we have operated as an early stage
company that is developing and now introducing its business.  As a
developing new company, we face all the risks inherent in a new business,
including the expenses, difficulties, complications and delays frequently
encountered in connection with commencing new operations, including capital
requirements and management’s potential underestimation of initial and ongoing
costs. We also face the risk that we may not be able to effectively implement
our business plan or successfully roll out new products.  If we are
not effective in addressing these risks, we may not develop a viable business or
may not operate profitably.  We expect to incur operating losses for
the near future, and there can be no assurance that we will be able to generate
revenues or that any revenues generated will be sufficient for us to become
profitable or thereafter maintain profitability.


~ 9
~




If
our strategy is unsuccessful, we will not be profitable and our stockholders
could lose their investment.




There is
no guarantee that our strategy for developing our three Internet platforms and
websites will be successful or that if successfully developed, will result in
this company becoming profitable. If our strategy is unsuccessful, we may fail
to meet our objectives and not realize the revenues or profits from the business
we pursue that may cause the value of Beyond Commerce, Inc. to decrease, thereby
potentially causing our stockholders to lose their investment.




We
may not be able to effectively control and manage our growth, which would
negatively impact our operations.




If our
business and markets grow and develop it will be necessary for us to finance and
manage expansion in an orderly fashion. We recently re-launched our i-SUPPLY
businesses.  These new product offerings and businesses will require
additional resources and personnel.  We may face challenges in
managing these and other expanding product and service offerings and in
integrating these businesses with our other website operations. Such
eventualities will increase demands on our existing management, workforce and
facilities. Failure to satisfy increased demands could interrupt or adversely
affect our operations, restrain the potential growth of the two new businesses,
and cause administrative inefficiencies.




We
may be unable to successfully execute all of our identified business
opportunities, or other business opportunities that we determine to
pursue.




We
currently have limited resources with which to fully develop our existing
businesses opportunities.  Our ability to successfully develop our
existing, and possible future, business opportunities will depend on one or more
of the following factors:




·
            our ability to raise substantial
      additional capital to fund the implementation of our business
      plan;




·
            our ability to execute our
      business strategy;




·
            the ability of our services to
      achieve market acceptance;




·
            our ability to manage the
      expansion of our operations and any acquisitions we may make, which could
      result in increased costs, high employee turnover or damage to customer
      relationships;




·
            our ability to attract and retain
      qualified personnel;




·
            our ability to manage our third
      party relationships effectively;
and




·
            our ability to accurately predict
      and respond to the rapid technological changes in our industry and the
      evolving demands of the markets we
serve.




Our
failure to adequately address any one or more of the above factors could have a
significant impact on our ability to implement our business plan and our ability
to pursue other opportunities that arise.




Our
businesses depend, to a large extent, on the development of strong brands, and
if we do not develop and enhance our brand, our ability to attract and retain
subscribers and customers may be impaired and our business and operating results
may be harmed.




We
believe that our brands are a critical part of our business. Developing and
enhancing our brand may require us to make substantial investments with no
assurance that these investments will be successful. If we fail to promote and
develop the “I-SUPPLY” or “BOOMj.com’’ brands, or if we incur significant
expenses in this effort, our business, prospects, operating results and
financial condition may be harmed. We anticipate that developing, maintaining
and enhancing our brands will become increasingly important, difficult and
expensive.




~ 10
~




Our
intellectual property rights are valuable, and any inability to protect them
could reduce the value of our products, services and brand.




Our
trademarks, trade secrets, copyrights and other intellectual property rights are
important assets for us. Various events outside of our control pose a threat to
our intellectual property rights as well as to our products and services. For
example, effective intellectual property protection may not be available in
every country in which our products and services are distributed or made
available through the internet. Also, the efforts we have taken to protect our
proprietary rights may not be sufficient or effective. Any significant
impairment of our intellectual property rights could harm our business or our
ability to compete. Also, protecting our intellectual property rights is costly
and time consuming. Any increase in the unauthorized use of our intellectual
property could make it more expensive to do business and harm our operating
results.




In
providing our services we could infringe on the intellectual property rights of
others, which may cause us to engage in costly litigation and, if we do not
prevail, could also cause us to pay substantial damages and prohibit us from
selling our services.




Third
parties may assert infringement or other intellectual property claims against
us. We may have to pay substantial damages, if it is ultimately determined that
our services infringe a third party’s proprietary rights. Even if claims are
without merit, defending a lawsuit takes significant time, may be expensive and
may divert management’s attention from our other business concerns.




Traffic
Levels on our BOOMj.com website and other websites can fluctuate, which could
materially adversely affect our business.




Traffic
levels to our websites can fluctuate significantly as a result of social,
political and financial news events. The demand for advertising, cross promotion
and subscriptions on the Company’s Websites as well as on the Internet in
general can cause changes in rates paid for Internet
advertising.  Fluctuating levels of visitors to our websites and to
websites for which we provide i-SUPPLY services, could harm our ability
marketing or advertising agreements, will result in lower sales and advertising
revenues, and could raise our budgeted marketing and advertising
costs.




Our
business may be adversely affected by malicious applications that interfere
with, or exploit security flaws in, our products and services.




Our
business may be adversely affected by malicious applications that make changes
to our users’ computers and interfere with the Internet products that we
provide.  These applications attempt to change our users’ internet
experience or may interfere with the operation and functionality of our web
products.  Malicious interference often occurs without disclosure to
or consent from users, resulting in a negative experience that users and
customers may associate with our company’s products and
services.  These applications may be difficult or impossible to
uninstall or disable, may reinstall themselves and may circumvent other
applications’ efforts to block or remove them. In addition, we offer a number of
products and services that our users download to their computers or that they
rely on to store information and transmit information to others over the
internet. These products and services are subject to attack by viruses, worms
and other malicious software programs, which could jeopardize the security of
information stored in a user’s computer or in our computer systems and networks.
The ability to reach users and provide them with a superior experience is
critical to our success.  If our efforts to combat these malicious
applications are unsuccessful, or if our products and services have actual or
perceived vulnerabilities, our reputation may be harmed and our user traffic
could decline, which would damage our business.




We
rely on bandwidth providers, data centers or others in providing products and
services to our users, and any failure or interruption in the services and
products provided by these third parties could harm our ability to operate our
business and damage our reputation.




We rely
on vendors, including data center and bandwidth providers. Any disruption in the
network access or collocation services provided by these providers or any
failure of these providers to handle current or higher volumes of use could
significantly harm our business. Any financial or other difficulties our
providers face may have negative effects on our business. We exercise little
control over these vendors, which increases our vulnerability to problems with
the services they provide. We license technology and related databases to
facilitate aspects of our data center and connectivity operations including
internet traffic management services. We have experienced and expect to continue
to experience interruptions and delays in service and availability for such
elements. Any errors, failures, interruptions or delays in connection with these
technologies and information services could harm our relationship with users,
adversely affect our brand and expose us to liabilities.





Our
systems are also heavily reliant on the availability of electricity. If we were
to experience a major power outage, we would have to rely on back-up generators.
These back-up generators may not operate properly and their fuel supply could be
inadequate during a major power outage. This could result in a disruption of our
business.




~ 11
~





Our
business depends on continued and unimpeded access to the Internet by us and our
users. Internet access providers may be able to block, degrade or charge for
access to certain of our products and services, which could lead to additional
expenses and the loss of users and advertisers.




Our
products and services depend on the ability of our users to access the internet,
and certain of our products require significant bandwidth to work effectively.
Currently, this access is provided by companies that have significant and
increasing market power in the broadband and internet access marketplace,
including incumbent telephone companies, cable companies and mobile
communications companies. Some of these providers have stated that they may take
measures that could degrade, disrupt or increase the cost of user access to
certain of our products by restricting or prohibiting the use of their
infrastructure to support or facilitate our offerings, or by charging increased
fees to us or our users to provide our offerings. These activities may be
permitted in the U.S. after recent regulatory changes, including recent
decisions by the U.S. Supreme Court and Federal Communications Commission and
under legislation being considered by the U.S. Congress. While interference with
access to our popular products and services seems unlikely, such carrier
interference could result in a loss of existing users and advertisers, increased
costs, and impair our ability to attract new users and advertisers, thereby
harming our revenue and growth.





We
may be subject to recently enacted privacy legislation and regulation which
could reduce our potential revenues and profitability.





Entities
engaged in operations over the internet, particularly relating to the collection
of user information, are subject to limitations on their ability to utilize such
information under federal and state legislation and regulation.  In
2000, the Gramm-Leach-Bliley Act required that the collection of identifiable
information regarding users of financial services be subject to stringent
disclosure and “opt-out” provisions.  While this law and the
regulations enacted by the Federal Trade Commission and others relates primarily
to information relating to financial transactions and financial institutions,
the broad definitions of those terms may make the businesses entered into by the
Company and its strategic partners subject to the provisions of the Act, which
may, in turn, increase the cost of doing business and reduce our
revenues.  Similarly, the Children On-line Privacy and Protection Act
(“COPPA”) imposes strict limitations on the ability of internet ventures to
collect information from minors. The impact of COPPA may be to increase the cost
of doing business on the internet and reduce potential revenue
sources.  We may also be impacted by the USA Patriot Act, which
requires certain companies to collect and provide information to United States
governmental authorities. A number of state governments have also proposed or
enacted privacy legislation that reflects or, in some cases, extends the
limitations imposed by the Gramm-Leach-Bliley Act and COPPA.  These
laws may further impact the cost of doing business on the internet.





Any attempt of federal or state
government to tax internet transactions could create uncertainty in our ability
to comply with varying, and potentially contradictory, requirements which could
negatively impact our business, results of operations, and financial
condition.





Currently,
the sale of goods and services on the internet is not subject to a uniform
system of taxation.  A number of states, as well as the federal
government, have considered enacting legislation that would subject internet
transactions to sales, use or other taxes.  Because there are a
variety of jurisdictions considering such actions, any attempt to tax internet
transactions could create uncertainty in the ability of internet-based companies
to comply with varying, and potentially contradictory,
requirements.  We cannot predict whether any of the presently proposed
schemes will be adopted.  We cannot predict the effect, if any, that
the adoption of such proposed schemes would have on our business with certainty;
however, they are likely to have a negative impact on our business, results of
operations or financial condition.





We
rely on highly skilled personnel and, if we are unable to retain or motivate key
personnel or hire qualified personnel, we may not be able to grow
effectively




The
success of this company depends in large part upon the abilities and continued
service of our executive officers and other key employees, particularly Mr.
Robert J. McNulty, Chairman &, Chief Executive Officer, and Mr. Mark V.
Noffke, Executive Vice President and Chief Financial Officer. There can be
no assurance that we will be able to retain the services of such officers and
employees. Our failure to retain the services of Messrs. McNulty and Noffke, and
other key personnel could have a material adverse effect on our business and
future prospects. At the present time, we have no employment agreements and
no key person insurance policies in place for any of the above referenced
individuals. In order to support our business plan, we will be required to
recruit effectively, hire, train and retain additional qualified management
personnel. Our inability to attract and retain the necessary personnel could
have a material adverse effect on our business.




~ 12
~




We
face intense competition from social networking sites and other Internet
businesses and may not be able to successfully compete.




We face
formidable competition in every aspect of our business, and particularly from
other companies that seek to connect people with information and entertainment
on the web. Such competitors include seniorjournal.com boomerwomenspeak.com,
aginghipsters.com, 50Plus.com, generationjones.com, Eons.com, AARP, YouTube, My
Space, Craig’s List, Evite, Shutterfly, Facebook and
YellowPages.com.




In
addition, we will be competing with other Internet companies, such as E-commerce
companies, general purpose consumer online services, such as America Online and
Microsoft Network; online services or Websites targeting business and financial
needs, such as TheStreet.com and Motley Fool; and other web “portal” companies,
such as Excite, Infoseek, Yahoo! and Lycos.




Many of
our competitors, particularly those in the advertising marketplace, have longer
operating histories and more established relationships with customers and end
users. They can use their experience and resources against us in a variety of
competitive ways, including by making acquisitions, investing more aggressively
in research and development and competing more aggressively for advertisers and
web sites. They may have a greater ability to attract and retain users than we
do because they operate internet portals with a broad range of content products
and services. If our competitors are successful in providing similar or better
web sites, more relevant advertisements or in leveraging their platforms or
products to make their web services easier to access, we could experience a
significant decline in user traffic or in the size of our network. Any such
decline could negatively affect our revenues.




We
face competition from traditional media companies, and we may not be included in
the advertising budgets of large advertisers, which could harm our operating
results.




In
addition to Internet companies, we face competition from companies that offer
traditional media advertising opportunities, including television, radio and
print. Most large advertisers have set advertising budgets, a very small portion
of which is allocated to internet advertising. We expect that large advertisers
will continue to focus most of their advertising efforts on traditional media.
If we fail to convince these companies to spend a portion of their advertising
budgets with us, or if our existing advertisers reduce the amount they spend on
our programs, our operating results would be harmed.




If
we do not continue to innovate and provide products and services that are useful
to users, we may not remain competitive, and our revenues and operating results
could suffer.




Our
success depends on providing products and services that make using the internet
a more useful and enjoyable experience for our users. Our competitors are
constantly developing innovations in web based products and services. As a
result, we must continue to invest significant resources in research and
development in order to enhance our existing products and services and introduce
new products and services that people can easily and effectively use. If we are
unable to provide quality products and services, then our users may become
dissatisfied and move to a competitor’s products and services. Our operating
results would also suffer if our innovations are not responsive to the needs of
our users and members, are not appropriately timed with market opportunities or
are not effectively brought to market. As internet broadcasting technology and
social networks continue to develop, our competitors may be able to offer
products and services that are, or that are seen to be, substantially similar to
or better than ours. This may force us to compete in different ways and expend
significant resources in order to remain competitive.




We
need to enter into strategic relationships with other Websites. If we are unable
to do so, our revenues and operating results will suffer.




We will
need to establish and maintain strategic relationships with other Websites to
attract users, advertisers and compelling content. There is intense competition
for placements and cross promotion on these sites, and we may not be able to
enter into relationships on commercially reasonable terms or not at all. In
addition we may have to pay significant fees to establish and maintain these
relationships.





Changing laws,
rules and regulations and legal uncertainties could increase the regulation of
our business and therefore increase our operating costs.





We are
subject to a number of foreign and domestic laws and regulations that affect
companies conducting business on the internet. In addition, laws and regulations
relating to user privacy, freedom of expression, content, advertising,
information security and intellectual property rights are being debated and
considered for adoption by many countries throughout the world. We face risks
from some of the proposed legislation that could be passed in the
future.




~ 13
~


In the
U.S., laws relating to the liability of providers of online services for
activities of their users and other third parties are currently being tested by
a number of claims, which include actions for defamation, libel, invasion of
privacy and other data protection claims, tort, unlawful activity, copyright or
trademark infringement and other theories based on the nature and content of the
materials searched, the ads posted or the content generated by users. Certain
foreign jurisdictions are also testing the liability of providers of online
services for activities of their users and other third parties. Any court ruling
that imposes liability on providers of online services for activities of their
users and other third parties could harm our business.





Likewise,
a range of other laws and new interpretations of existing laws could have an
impact on our business. For example, in the U.S. the Digital Millennium
Copyright Act has provisions that limit, but do not necessarily eliminate, our
liability for listing, linking or hosting third-party content that includes
materials that infringe copyrights or other rights. The costs of compliance with
these laws may increase in the future as a result of changes in interpretation.
Furthermore, any failure on our part to comply with these laws may subject us to
significant liabilities. Similarly, the application of existing laws
prohibiting, regulating or requiring licenses for certain businesses of our
advertisers, including, for example, online gambling, distribution of
pharmaceuticals, adult content, financial services, alcohol or firearms, can be
unclear. Application of these laws in an unanticipated manner could expose us to
substantial liability and restrict our ability to deliver services to our users.
For example, some French courts have interpreted French trademark laws in ways
that would, if upheld, limit the ability of competitors to advertise in
connection with generic keywords.





We are
also subject to federal, state and foreign laws regarding privacy and protection
of user data. Any failure by us to comply with our posted privacy policies or
privacy-related laws and regulations could result in proceedings against us by
governmental authorities or others, which could potentially harm our business.
In addition, the interpretation of data protection laws, and their application
to the internet, in Europe and other foreign jurisdictions is unclear and in a
state of flux. There is a risk that these laws may be interpreted and applied in
conflicting ways from country to country and in a manner that is not consistent
with our current data protection practices. Complying with these varying
international requirements could cause us to incur additional costs and to have
to change our business practices. Further, any failure by us to protect our
users’ privacy and data could result in a loss of user confidence in our
services and ultimately in a loss of users, which would adversely affect our
business.




Risks
Related to Ownership of our Common Stock




Our
stock is thinly traded, so you may be unable to sell your shares at or near the
quoted bid prices if you need to sell a significant number of your
shares.




The
shares of our common stock are thinly-traded on the OTC Bulletin Board, meaning
that the number of persons interested in purchasing our common shares at or near
bid prices at any given time may be relatively small or non-existent. This
situation is attributable to a number of factors, including the fact that we are
a small company which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven, early stage company such as ours or purchase or recommend the purchase
of our shares until such time as we became more seasoned and viable. As a
consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a seasoned issuer which
has a large and steady volume of trading activity that will generally support
continuous sales without an adverse effect on share price. We cannot give you
any assurance that a broader or more active public trading market for our common
shares will develop or be sustained, or that current trading levels will be
sustained. Due to these conditions, we can give you no assurance that you will
be able to sell your shares at or near bid prices or at all if you need money or
otherwise desire to liquidate your shares.





Our
current stockholders are subject to substantial dilution if all of the currently
outstanding convertible promissory notes are converted.





As of
April 19, 2010, we had approximately 59,493,311 shares of common stock
outstanding.  However, another 56,366,550 shares of our common stock
are currently issuable upon conversion of currently outstanding convertible
promissory notes.  Accordingly, if these convertible promissory notes
were to be converted, our current stockholders’ interest in our company would be
decreased by 48%.




~ 14
~




Certain
convertible bond holders may have in the past and may currently have sold our
stock short and may profit from a decline in our stock price.




The
holders of our convertible promissory notes and detachable warrants issued to
OmniReliant Holdings during the second and third quarter of 2009, of which
$1,623,322 of convertible debentures and  remains outstanding and
48,852,741 warrants remain outstanding as of December 31, 2009, all with
conversion prices and exercise prices of $0.10 per share, made certain negative
covenants within the Securities Purchase Agreement which governs the terms of
the convertible promissory notes such that they would not covenant not to sell
short the Company’s shares of common stock after the Company announced the
transactions consummation back in June 2009.  The convertible notes
and warrants that were issued in connection with the convertible notes have
reset provisions, such that should the Company issue any instrument with an
effective price below the then current conversion price and exercise price, the
conversion price of the convertible notes and the exercise of the warrants would
decrease to that lower price.  In addition, the number of warrant
shares also increases such that the original amount of proceeds to be received
on exercise remains constant.  Thus OmniReliant could benefit
significantly from decreases in our stock price from selling short our stock,
such that they could profit from those short sales even if they were unable to
recover from their remaining outstanding convertible promissory notes while
being protected from losing money should our shares increase in value due to
having shares readily available to them through conversion or
exercise.




If
a more active market for our common stock develops, there is a significant risk
that our stock price may fluctuate dramatically which could negatively impact
your investment in our common stock.




There is
only a limited market for our common stock and a viable market for our common
stock may never develop further.  If a more active market for our
common stock develops, there is a significant risk that our stock price may
fluctuate dramatically in the future in response to any of the following
factors, some of which are beyond our control including:




·
            variations in our quarterly
      operating results;




·
            announcements that our revenue or
      income are below or that costs or losses are greater than analysts’
      expectations;




·
            general economic
      slowdowns;




·
            sales of large blocks of our
      common stock;




·
            announcements by us or our
      competitors of significant contracts, acquisitions, strategic
      partnerships, joint ventures or capital
  commitments;




·
            fluctuations in stock market
      prices and volumes;




·
            concern by potential investors
      that the large number of shares of common stock which may be sold pursuant
      to this prospectus may have a downward effect upon the market price of the
      stock; and




·
            the occurrence of any of the
      risks described in this
report.




Dramatic
fluctuations in the price of our common stock may make it difficult to sell our
common stock.




Failure
to achieve and maintain effective internal controls in accordance with section
404 of the Sarbanes-Oxley act could have a material adverse effect on our
business and operating results and stockholders could lose confidence in our
financial reporting.




Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. If we cannot provide reliable financial reports or
prevent fraud, our operating results could be harmed. We may be required to
document and test our internal control procedures in order to satisfy the
requirements of Section 404 of the Sarbanes-Oxley Act, which requires increased
control over financial reporting requirements, including annual management
assessments of the effectiveness of such internal controls and a report by our
independent registered public accounting firm addressing these assessments.
Failure to achieve and maintain an effective internal control environment,
regardless of whether we are required to maintain such controls, could also
cause investors to lose confidence in our reported financial information, which
could have a material adverse effect on our stock price.





Because we are
subject to the “penny stock” rules, you may have difficulty in selling our
common stock.




Our
common stock is subject to regulations of the SEC relating to the market for
penny stocks. Penny stock, as defined by the Penny Stock Reform Act, is any
equity security not traded on a national securities exchange or quoted on any
market of the NASDAQ Stock Market that has a market price of less than $5.00 per
share. The penny stock regulations generally require that a disclosure schedule
explaining the penny stock market and the risks associated therewith be
delivered to purchasers of penny stocks and impose various sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors. The broker-dealer must make a
suitability determination for each purchaser and receive the purchaser’s written
agreement prior to the sale. In addition, the broker-dealer must make certain
mandated disclosures, including the actual sale or purchase price and actual bid
offer quotations, as well as the compensation to be received by the
broker-dealer and certain associated persons. The regulations applicable to
penny stocks may severely affect the market liquidity for your common stock and
could limit your ability to sell your securities in the secondary
market.


~ 15
~




As
an issuer of “penny stock”, the protection provided by the federal securities
laws relating to forward looking statements does not apply to us.




Although
federal securities laws provide a safe harbor for forward-looking statements
made by a public company that files reports under the federal securities laws,
this safe harbor is not available to issuers of penny stocks. As a result, if we
are a penny stock, we will not have the benefit of this safe harbor protection
in the event of any legal action based upon a claim that the material provided
by us contained a material misstatement of fact or was misleading in any
material respect because of our failure to include any statements necessary to
make the statements not misleading. Such an action could hurt our financial
condition.




The
stock market in general has experienced volatility that often has been unrelated
to the operating performance of listed companies. These broad fluctuations may
be the result of unscrupulous practices that may adversely affect the price of
our stock, regardless of our operating performance.





Shareholders
should be aware that, according to SEC Release No. 34-29093 dated April 17,
1991, the market for penny stocks has suffered in recent years from patterns of
fraud and abuse. Such patterns include (1) control of the market for the
security by one or a few broker-dealers that are often related to the promoter
or issuer; (2) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (3) boiler room practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask differential
and markups by selling broker-dealers; and (5) the wholesale dumping of the same
securities by promoters and broker-dealers after prices have been manipulated to
a desired level, along with the resulting inevitable collapse of those prices
and with consequent investor losses. The occurrence of these patterns or
practices could increase the volatility of our share price.





Our management
and directors, together with their family members, may control a sufficient
number of shares of our common stock to be able to prevent a change in
control.




Mr.
Robert J. McNulty, our Chairman and Chief Executive Officer, Mr. Mark V. Noffke,
our Executive Vice President of Finance and CFO, Mr. Jimmy White our Executive
Vice President of operations along with Mr. Murray Williams and Mr. Barry Falk
members of our board of directors collectively beneficially own approximately
1.6% of the outstanding shares of our Common Stock.  However,
approximately 18.5% of our issued and outstanding stock is held by Linlithgow
Holdings LLC, an entity owned and controlled by the immediate family members of
Mr. Robert J. McNulty. Mr. McNulty is not a member or manager of Linlithgow
Holdings LLC and he disclaims any beneficial interests in these shares. Mr.
McNulty does not exercise any voting rights in respect of these shares nor does
he have any right to dispose of these shares.  Nevertheless,
Linlithgow Holdings LLC could resist any change of control that would remove Mr.
McNulty or any of the other officers or directors and, together with Mr.
McNulty, Ms. Johnson, Mr. Noffke and Mr. Williams if they act in concert, can
exercise substantial influence over our business by virtue of their voting power
with respect to the election of directors and all other matters requiring action
by stockholders. Such concentration of share ownership may have the effect of
discouraging, delaying or preventing a change in control of this
company.




Substantial sales of our common stock
could cause our common stock price to fall.




Currently,
approximately 59,493,311   shares of our currently outstanding common
stock and another 56,366,550 shares of our common stock issuable upon conversion
of currently outstanding convertible promissory notes are eligible to be sold
pursuant to Rule 144.  The sale of these shares, or even the
possibility that substantial amounts of these shares of our common stock may be
sold in the public market, may adversely affect prevailing market prices for our
common stock and could impair our ability to raise capital through the sale of
our equity securities.





ITEM 1B.
            UNRESOLVED STAFF
      COMMENTS.




Not
applicable.




ITEM 2.
            DESCRIPTION OF
      PROPERTY




Our
executive offices are located at 9029 South Pecos, Suite 2800, Henderson, Nevada
89074, and consist of two adjacent offices totaling 10,194 square feet, and is
leased at a monthly rate of $23,115 until December 31, 2011. We believe that our
properties and are adequate for our current and immediately foreseeable
operating needs.


~ 16
~




ITEM 3.
            LEGAL
      PROCEEDINGS




On
February 17, 2010, the Internal Revenue Service placed a federal tax lien of
$756, 711 against all of the property and rights to the property of Boomj.com
for unpaid federal withholding taxes for the year ended December 31,
2009.





Other
than the foregoing IRS tax lien, we are not a party to any material legal
proceedings.  From time to time, the Company is a party to various
legal matters in the normal course of business, the outcome of which, in the
opinion of management, will not have a material adverse effect on the financial
position, results of operations or cash flows of the Company.





ITEM 4.
            RESERVED




PART
II




ITEM 5.
            MARKET FOR COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES.




On
January 15, 2008 our common stock began trading on the OTC Bulletin Board under
the symbol “RLET”. On January 31, 2008 our trading symbol changed to
“BOMJ.”  Subsequently on February 23, 2009 our stock symbol changed in
conjunction with our name change to “BYOC.”




As of
December 31, 2009 there were 201 record holders of our common
stock,  and believe there is another 1,925 of persons who hold their
stock in “street name.”




As of
December 31, 2009 we had 58,793,311 outstanding shares of common
stock.




The
following table sets forth the high and low bid prices for our common stock for
the periods indicated as reported by the OTC Bulletin Board.  The
quotations reflect inter-dealer prices, without retail mark-ups, mark-downs, or
commissions and may not necessarily represent actual transactions.





High
                                    
                                    
                                    LowYear
      ended December 31, 2008First
      Quarter
                                    
                                    $
                                    2.47
                                    
                                    
                                    $
                                    0.75Second
      Quarter
                                    
                                    $
                                    3.30
                                    
                                    
                                    $
                                    1.86Third
      Quarter
                                    
                                    $
                                    3.30
                                    
                                    
                                    $
                                    2.30Fourth
      Quarter
                                    
                                    $
                                    2.55
                                    
                                    
                                    $
                                    0.55Year
      ended December 31, 2009First
      Quarter
                                    
                                    $
                                    1.80
                                    
                                    
                                    $
                                    0.33Second
      Quarter
                                    
                                    $
                                    1.88
                                    
                                    
                                    
                                    0.45Third
      Quarter
                                    
                                    $
                                    0.50
                                    
                                    
                                    $
                                    0.055Fourth
      Quarter*
                                    
                                    $
                                    0.30
                                    
                                    
                                    $
                                    0.017




The last
reported sales price of our common stock on the OTC Bulletin Board on April 14,
2010 was $0.05 per share.




Dividends
and Dividend Policy




We have
not previously paid any cash dividends on our common stock and do not anticipate
or contemplate paying dividends on our common stock in the foreseeable future.
We currently intend to use all available funds to develop our business. We can
give no assurances that we will ever have excess funds available to pay
dividends.




Repurchase
of Securities





We did
not repurchase any shares of our common stock during the fiscal year ended
December 31, 2009.




~ 17
~




Recent
Sales of Unregistered Securities




The
issuance of  the following securities was exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
under Section 4(2) of the Securities Act as transactions by an issuer not
involving any public offering, or under Rule 506 of Regulation D promulgated
under the Securities Act.




During
the first quarter 2009 we issued 25,000 shares of common stock for cash at $0.80
per share to an accredited investor. We also issued an additional 16,000 shares
of stock as employee compensation to three individuals. The issuance of
securities is exempt from the registration requirements of the Securities Act,
under Section 4(2) of the Act as transactions by an issuer not involving any
public offering.
 
 During
the second quarter 2009 the company issued 256,000 shares of common stock in
lieu of cash to sixteen of our independent commissions sales representatives.
Also during the quarter we issued 295,000 shares of common stock in payment of
professional services received from three individuals. Furthermore during this
period Company issued 2,500 shares of common stock as compensation to an
employee. The issuance of securities is exempt from the registration
requirements of the Securities Act, under Section 4(2) of the Act as
transactions by an issuer not involving any public offering.
 .
 During
the third quarter 2009 the company issued 1,116,000 shares of common stock in
payment of professional services received from eight entities. The issuance of
securities is exempt from the registration requirements of the Securities Act,
under Section 4(2) of the Act as transactions by an issuer not involving any
public offering.




During
October 2009, the company sold 8,000,000 shares of common stock for $800,000 to
Zurvita Holdings, Inc., an accredited investor as part of the sale of Local Ad
Link assets.





In
October 2009 and February 2010, the Company issued 1,700,000 shares of its
common stock to a consultant for professional services rendered.





In
October 2009, one of our secured note holders converted his $70,000 note into
700,000 shares of the Company common stock.  The $15,237 interest
accrued on the note was converted into 152,370 shares of the Company common
stock.





During
the fourth quarter of 2009, three of our bridge note holders converted a total
of $230,000 into 2,300,000 shares of the Company common stock.





Since the
adoption of 2008 Equity Incentive Plan at December 31, 2009, we have granted a
total of 6,321,136 options at a strike price ranging from $0.10-$1.70 per share
to our employees. Of those granted options, 2,203,585 have expired leaving the
total employee options outstanding as of December 31, 2009 at
4,117,551.





Equity
Compensation Plans




The
following table sets forth certain information as of December 31, 2009,
regarding securities authorized for issuance under our equity compensation
plans:




Plan Category
                          
                          (a)
                            Number of Securities
                            to be Issued Upon
                            Exercise of
                            Outstanding Options,
                            Warrants and Rights
                          
                          
                          (b)
                            Weighted-Average
                            Exercise Price of
                            Outstanding Options,
                            Warrants and Rights
                          
                          
                          Number of Securities
                            Remaining Available
                            for Issuance Under
                            Equity
                            Compensation
                            Plans (Excluding
                            Securities Reflected
                            in Column (a)Equity
      compensation plans approved by our security holders:2008
      Equity Incentive Plan(1)
                          
                          
                          4,117,551
                          
                          
                          $
                          0.74
                          
                          
                          
                          2,882,449Equity
      compensation plans not approved by our security holders:
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Total
                          
                          
                          4,117,551
                          
                          
                          $
                          0.74
                          
                          
                          
                          2,882,449





(1)
            On September 11, 2008, our Board
      of Directors adopted Beyond Commerce’s 2008 Equity Incentive Plan, and on
      June 12, 2009 the Board amended the plan to increase the number of shares
      of common stock that may be issued under the plan from 3,500,000 to
      7,000,000.  The amended plan was approved by our stockholders at our
      2009 Annual Meeting of stockholders.  Effective April 1, 2010,
      the Board of Directors further increased the number of shares issuable
      under the 2008 Equity Incentive Plan by 10,000,000 to a total of
      17,000,000 shares.





ITEM 6.
            SELECTED FINANCIAL
      DATA.




Not
applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC
Regulation S-K.




~ 18
~




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




The
following information should be read in conjunction with our consolidated
financial statements and notes thereto appearing elsewhere in this Form
10-K.




Overview




This
company, formerly known as Reel Estate Services Inc. was incorporated in Nevada
as a development stage company on January 12, 2006 to create a web-based service
that lists properties across the globe that are available for rental and/or use
by film and television companies as filming locations. We never earned any
revenue from our former Reel Estate Services internet site, and in September
2007 prior management terminated those operations.





On
December 28, 2007 Reel Estate Services, Inc. acquired BoomJ.com, Inc. through a
triangular merger (the “Merger”) in which it issued 34,458,067 shares of common
stock to the former shareholders of BoomJ.com, Inc. For financial statement
purposes, our acquisition of Boomj.com, Inc. was treated as a reverse
acquisition as though BoomJ.com, Inc. had acquired us since the prior
shareholders’ of BoomJ.com, Inc. ended up with a majority ownership in our
stock.





During
the fourth quarter of 2009, we started a new company, KaChing KaChing and have
consolidated the operations of this entity into our fiscal 2009 operating
results.  In November of 2008 we changed our name from Boomj, Inc. to
Beyond Commerce, Inc.




The goal
of this company is to generate revenues primarily from E-commerce transactions,
store licenses and website advertising. Throughout 2009, we operated BOOMj, www.BOOMj.com, the leading
niche portal and social networking site for Baby Boomers and Generation
Jones.  Revenues from this website were derived from advertising sales
and E-commerce transactions effected through the on-line store on that
website.  Our LocalAdLink subsidiary operated a website, www.LocalAdLink.com, and
a local search directory and advertising network that brings local advertising
to geo-targeted consumers.  We started to generate revenues from sales
of local advertising through LocalAdLink after that product was released in
October 2008.  On October 9, 2009, LocalAdLink Inc., a wholly-owned
subsidiary of the Company, sold its LocalAdLink Software (the “Software”) and
all of their assets related to the Software including the rights to the name
LocalAdLink, the LocalAdLink trademark, the  Web site,www.LocalAdLink.com
, and a local search directory and advertising network that brings local
advertising to geo-targeted consumers, (see Note 16).  We will continue to
sell advertising as it had prior to inception of Local Ad Link, Inc., however on
a different scale with a greater emphasis on business to business
sales.





Another  revenue
source, i-SUPPLY, www.i-SUPPLY.com, is a retail
storefront for any third party Websites that we commercially released in March
2009.  A major component of our business strategy in 2009 was to
maximize revenues from E-commerce sales made through our BOOMj
Store.  In order to be able to offer and sell products through that
website, we needed to obtain credit from the vendors of the products offered on
the website.   Because of our weak financial condition in 2009,
we did not receive the amount of credit from vendors that we needed and, as a
result, we were not able to effectively operate the BOOMj Store (in fact, the
BOOMj Store had limited operations during the later part of
2009).





Our final
source of revenue in 2009 was KaChing KaChing,  an early-stage
development company with a limited operating history that we launched its
website www.kachingkaching.com in September 2009.  KaChing is a
progressive e-commerce company dedicated to offering of an e-commerce solution
that provides individual store owners the ability to create, manage and earn
money from product sales generated from their individual online web stores. This
business model is basically a retail chain of online stores serving consumers on
the Internet. KaChing offers back office that allows Store Owners to easily
manage their stores and track commissions, basically a complete turn-key
operation. A Store Owner is principally charged with marketing and managing his
website.  In addition, a Store Owner can, depending on his license,
recruit other store owners and receive a recruiting
bonus.




We
reported a consolidated net loss of $11,656,030 for the twelve months ended
December 31, 2009, a consolidated net loss of $13,595,294 for the twelve months
ended December 31, 2008.  The loss in 2009 was principally
attributable to increase in operating costs, as more fully explained in
“Operating Expenses” below.




We sold
our LocalAdLink operations in October 2009 and revenue and expenses related to
LocalAdLink have been segregated into one line item in the statement of
operations titled “Loss from discontinued operations before income
taxes.”
 
 Results
of Operations — Revenues
 
 Our goal
is to generate revenues from the sale of various products to our website users
and from advertising fees. We operated our Boomj.com website throughout
2009.  However, we only commenced our i-SUPPLY operations during the second
quarter of 2009 and our KaChing KaChing operations during the end of the third
quarter of 2009.  Our revenues decreased from $1,060,272 to $903,852. This
decrease in merchandise sales from $1,060,272 to $95,595 resulted from a
restriction in the credit lines with our sundry vendors and the timing of the
relaunching of the i-SUPPLY E-commerce social selling platform which occured
late in the third quarter 2009. However, a new product offering was
established within i-SUPPLYand KaChing KaChing, Inc. reflecting store licensing
and membership revenue of $808,257 compared to zero in 2008.
 
 Throughout
2009 until October we had $13,049,619 in revenue which was derived from
LocalAdLink operations which is reflected in “Loss
from discontinued operations before income taxes.”Because we sold
LocalAdLink we will not generate revenues from this entity.  Accordingly,
we anticipate that our revenues in 2010 will be less than the revenues derived
in 2009.


~ 19
~


Operating
Expenses
  Selling,
general and administrative expenses (SG&A), including related party
expenditures, for the twelve month period ended December 31, 2009 (“fiscal
2009”) were $5,328,193. This reflects a decrease of $911,763 in SG&A
expenses from the $6,239,956 reported for the twelve month period ended December
31, 2008 (“fiscal 2008). The change in SG&A expenses is attributable to
decreased advertising and marketing and promotional costs from fiscal
2008. There
were also increases in administrative, technical and marketing personnel,
related payroll costs, and an increase in travel related costs as well as
computer and internet and merchant fees. Our SG&A expenses are expected to
decrease during the current fiscal year ending December 31, 2010 as we decrease
our operations and advertising due to a large extent, to the disposition of
LocalAdLink, and as we streamline our operations. Professional fees for the
twelve month period ended December 31, 2009 were $2,058,914. The largest
component of professional fees consists of services rendered in connection with
the design and establishment of our websites and Internet related activities, as
well as legal and accounting fees. This reflects an increase of $738,568 in
professional fees as compared to $1,320,346 for fiscal 2008. Included in the
professional fees and SG&A are non-cash items of $1,795,397 for the year
ended December 31, 2009 as compared to $1,703,459 for fiscal 2008 in stock
issued in exchange for a variety of consulting services and employee
options.
  Depreciation
and amortization expense for the twelve month period ended December 31, 2009 was
$198,873. This reflects an increase of $73,739 in depreciation and amortization
expense from the $181,134 reported for the period ended December 31, 2008. The
increase in expense is attributable to the amortization of the asset additions
during the period ended December 31, 2009.  Interest expense, of $8,585,204
for the twelve month period ended December 31, 2009 reflects an increase of
$5,259,542 from the interest expense of $3,325,662 of which $2,177,051 was to a
related party in fiscal 2009.The loan discount relates to the sundry loans
procured by us during the year ended December 31, 2007, fiscal 2008 and fiscal
2009. Interest expense also includes non-cash expenses related to the value of
warrants issued to investors who invested in our convertible notes and the
related debt discounts from beneficial conversion features or allocating the
loan proceeds between the debt and equity issued. Our increase in interest
expense is due to loan fees and loan discount amortization expenses of
$7,791,100. The loan discount relates to the sundry loans procured by us during
2007, 2008 and 2009.




Liquidity
and Capital Resources




As of
December 31, 2009, we had a working capital deficit of
$13,072,314.  Cash and cash equivalents at December 31, 2009 were only
$7,205, a decrease of $92,881 from the balance of $100,086 at December 31,
2008.  Much of our liquidity and capital resources during fiscal 2009
were derived through the sale of convertible debt and equity securities. No
assurance can be made that we will have access to the capital markets in future,
or that financing will be available on acceptable terms to satisfy our future
and on-going cash requirements that we need to implement its business
strategies. Our inability to access the capital markets or obtain acceptable
financing could have a material adverse affect on its results of operations and
financial condition, and could severely threaten our ability to continue as a
going concern.




As shown
in the accompanying consolidated financial statements, we incurred a loss of
$11,656,030 for the twelve month period ended December 31, 2009. Our current
liabilities less debt and derivatives exceeded current assets by $4,814,258 at
December 31, 2009, and negative cash flow from continuing operating activities
for the twelve months ended December 31, 2009 was $2,241,398.  In
addition, on January 31, 2010 we were unable to pay our secured convertible
promissory note holders the amounts due to them as the notes had
matured.  Under the terms of the notes, the holders may at any time
elect to notify us of the default and foreclose on essentially all of our
assets.  In addition, the OmniReliant notes contain cross default
provisions, such that those notes are also in default due to our being in
default of the secured convertible promissory notes.  The total amount
outstanding on these notes as of December 31, 2009 was
$5,023.322.  These factors, and our lack of ability to meet our
obligations from current operations, and the need to raise additional capital to
accomplish our objectives, create a substantial doubt about our ability to
continue as a going concern.




~ 20
~





We
currently do not have sufficient funds on hand to fund our on-going day to day
operating expenses. We have been unable to pay our employees since the fourth
quarter of 2009, and a limited amount of money has gone to
vendors.  In February 2010, we temporarily move out of our office
space.  We do not have any bank credit lines. Accordingly, we will
have to obtain additional funding in the near future in order to continue our
operations. Although the amount of revenues that we are now generating from our
existing operations (excluding LocalAdLink, which we sold in 2009) is increasing
gradually on a monthly basis, we do not anticipate that we will generate
sufficient cash from operations to fund our working capital needs until the
second half of 2010, at the earliest.  (Although LocalAdLink generated
approximately $13,050,000 of revenues in fiscal 2009, those operations also had
a net loss of $7,580,839.) Also, as noted above, we currently have in excess of
$5 million of secured promissory notes that are in default and thus immediately
due and payable.  In addition, in February 2010, the US Treasury
placed a lien on essentially all of the assets of Boomj.com Inc. because of
approximately $700,000 of unpaid payroll taxes.  Accordingly to
continue operating and to fund operations for the next twelve months, we
will have to continue to seek additional financing from various sources in the
immediate future, including from the sale of convertible debt or equity
securities and possibly from joint ventures, partnerships, and other strategic
relationships.  We have not yet identified, and cannot be sure that we
will be able to obtain any additional funding from either of these sources, or
that the terms under which we may be able to obtain such funding will be
beneficial to us. In addition we are maximizing the margins in our remaining
product lines and expanding the capabilities of the widget technologies
of  our i-SUPPLY division along with identifying some strategic
partners to assist in the distribution channels through product and operating
lines of credit. If we do not obtain sufficient additional funds in the
immediate future, we will have to suspend some of our operations, scale down our
current and proposed future operations or, if those actions are not sufficient,
terminate our operations. Should we obtain financing at a price below $0.10 per
share of our common stock, additional substantial dilution to our existing
shareholders will occur.   Although our revenues will be less, we
believe that our cash flow from operations may improve in 2010 because
LocalAdLink utilized substantial resources, which we no longer have to support,
We believe the KaChing KaChing, revenue stream to have higher margins and be
more cost effective as it ramps up.




All of
the convertible notes that we have issued during the past year in order to fund
our working capital needs mature during 2010 (most of which matured on January
31, 2010).  Accordingly, in addition to having to raise funds to
continue to operate, we also will have to raise funds to repay these convertible
notes (to the extent that such notes are not converted by the
holders).   Alternatively, we will have to try to obtain loan
extensions or forbearances from the noteholders.  As of December 31,
2009, the total amount of our short-term borrowings was
$6,356,655.  There can be no assurance that we will be able to obtain
extensions or forbearances from all of our note holders should we be unable to
raise the necessary capital to retire the debt currently
outstanding.









Operating
Activities




Net cash
used in continuing operating activities for the twelve months period ended
December 31, 2009 was $2,241,398. This was mainly attributable from the use of
cash in operations as we established new businesses and operations. Accounts
Receivable decreased $21,274 to $10,697 on December 31, 2009. This decrease was
attributable to collection of old advertising sales. The credit card payments
for prior year sales were subsequently captured during 2009. Accounts Payable on
December 31, 2009 was $2,278,347, an increase of $355,144 from the balance on
December 31, 2008. The increase is attributed mainly to professional fees
incurred and unpaid.





Investing
Activities




Net cash
used in continuing investing activities for the twelve month period ended
December 31, 2009 was $96,155, a decrease of $26,155  compared to
the $112,310 used in continuing investing activities for the  twelve
month period ended December 31, 2008. The company expended cash for purchase of
computer and office equipment and expenditures related to its business
development.




Financing
Activities




Net cash
provided by continuing financing activities for the twelve month period
ended December 31, 2009 was $7,342,053, an increase of $1,490,355 from the net
cash provided by continuing financing activities for the twelve month period
ended December 31, 2008.  The cash provided during 2009 is due
primarily to net cash received from the sale of debt securities of
$8,930,000.  During the twelve month period ended December 31, 2009,
we repaid $1,657,947 of debt securities and converted $2,400,000 of secured debt
into shares of common stock.  We also received $820,000 from the
issuance of 8,025,000 shares of Company common stock.




As a
result of the above activities, we experienced a net decrease in cash of $92,881
for the twelve month period ended December 31, 2009. Our ability to continue as
a going concern is dependent on our success in obtaining additional financing
from investors through the sale of its securities and through a continued
increase in revenues.


~ 21
~




Other




We do not
believe that inflation has had a material impact on our business or
operations.




We are
not a party to any off-balance sheet arrangements, and we do not engage in
trading activities involving non-exchange traded contracts. In addition, we have
no financial guarantees, debt or lease agreements or other arrangements that
could trigger a requirement for an early payment or that could change the value
of our assets




Going
Concern




This
company’s financial statements are prepared using generally accepted accounting
principles, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. However, the company has an
accumulated deficit of $30,279,715 on December 31, 2009 and will need to raise
additional capital, or obtain financing to continue operations. The enclosed
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should this company be
unable to continue as a going concern.





Management
is taking steps to address our operating and financial cash requirements, which
steps, if successful, will, we believe, l be sufficient to provide the company
with the ability to continue operations in next twelve months. Management has
devoted a significant amount of time in the raising of capital and improving the
company’s operations, while reducing operating expenses.  However, the
company’s ability to continue as a going concern is dependent upon raising funds
through debt and equity financing and generating revenue. There are no
assurances this company will receive the necessary funding or generate revenue
necessary to fund operations. This raises substantial doubt about this Company’s
ability to continue as a going concern.




Application
of Critical Accounting Policies


~ 22
~




All
sources of revenue are recorded in accordance with FASB Accounting Standards
Codification (“FASC”) 605-45-45, Revenue Recognition - Principal
Agent Considerations when persuasive evidence of arrangement exists,
delivery of services has occurred, the fee is fixed or determinable and
collectability is reasonably assured.




Stock-Based
Compensation




Beginning
July 1, 2007, we began accounting for stock options under the provisions of ASC
718, Stock
Compensation, which requires the recognition of the fair value of
stock-based compensation. Under the fair value recognition provisions for ASC
718, stock-based compensation cost is estimated at the grant date based on the
fair value of the awards expected to vest and is recognized as expense ratably
over the requisite service period of the award. We have used the Black-Scholes
valuation model to estimate fair value of our stock-based awards which require
various judgmental assumptions including estimating price volatility and
expected life. Our computation of expected volatility is based on a combination
of historic and market-based implied volatility. In addition, we consider many
factors when estimating expected life, including types of awards and historical
experience. If any of these assumptions used in the Black-Scholes valuation
model change significantly, stock-based compensation expense may differ
materially in the future from what is recorded in the current
period.





The
Company follows the guidance of FASC 505-50 share based payments to non
employees Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services” for transactions in which equity instruments are
issued in exchange for the receipt of goods or services to non
employees.





Issuance
of Shares for Service




The
Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.




~ 23
~


In May
2008, the FASB issued Staff  Position No. APB 14-1,  Accounting for
Convertible  Debt  Instruments  That  May
Be  Settled  in Cash  upon  Conversion
(Including  Partial Cash  Settlement),  or
FSP APB 14-1.  FSP APB 14-1 specifies that issuers of convertible debt
instruments that may be settled in cash upon conversion should separately
account for the liability and equity components in a manner that will reflect
the entity’s nonconvertible debt borrowing rate when interest cost is recognized
in subsequent periods. We are required to adopt FSP APB 14-1 at the beginning of
2009 and apply FSP APB 14-1 retrospectively to all periods
presented.  We are currently evaluating the impact of adopting FSP APB
14-1 on our results of operations and financial condition.




ITEM 7A.
            QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET
RISK




Not
applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC
Regulation S-K.




ITEM 8.
            FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA




Financial
Statements are referred to in Item 15(a), listed in the Index to Financial
Statements and filed and included elsewhere herein as a part of this Annual
Report on Form 10-K.





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




None




ITEM 9A.
            CONTROLS AND
      PROCEDURES




Evaluation
of disclosure controls and procedures





Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer (“Certifying Officers”), has evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) as of the end of the fiscal period covered by
this Annual Report on Form 10-K. Based upon such evaluation, the Certifying
Officers have concluded that, as of the end of such period, December 31, 2009,
the Company’s disclosure controls and procedures were not effective to ensure
that information required to be disclosed by us in the reports we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms and is accumulated and
communicated to management, including our Certifying Officers, to allow timely
decisions regarding such disclosure.





Management’s
report on internal control over financial reporting





Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) for the Company. The Company maintains processes designed by,
or under the supervision of the Company’s management, including but not limited
to the Company’s Chief Executive Officer and its Chief Accounting Officer, or
persons performing similar functions, and effected by the Company’s board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles including policies and procedures that: (i) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and disposition of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the issuer are
being made only in accordance with authorization of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





The
Company has an Audit Committee that meets periodically with management to review
the manner in which they are performing their responsibilities and to discuss
auditing, internal accounting controls and financial reporting
matters.





Management
has conducted an evaluation of the Company’s internal control over financial
reporting using the Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission as a basis to
evaluate effectiveness and determined that internal control over financial
reporting was effective as of the end of the fiscal year ended December 31,
2009. Based upon that evaluation, the Company’s Chief Executive and Financial
Officer concluded that the Company’s internal control over financial reporting
is not effective due to
the material weakness noted below. A
material weakness is a control deficiency, or combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Company’s annual or interim
financial statements will not be prevented or detected on a timely basis. The
following material weakness has been identified. The Company downsized its
workforce in 2009 and at December 31, 2009 did not have sufficient people to
support its internal control over financial reporting which impacted its
financial close process.




~ 24
~




This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting. Our
internal control over financial reporting was not subject to attestation by the
company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the company to provide only
management’s report in this annual report.




Changes
in internal controls over financial reporting




Due to
significant reductions in the number of employees we did not have sufficient
people to meet the requirements of our internal control over financial
reporting.  Other than the significant decrease in employees,there were no
other significant changes in the Company's internal control over financial
reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter
ended December 31, 2009, that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial
reporting.




ITEM 9B.
            OTHER
      INFORMATION




For the
fourth quarter ended December 31, 2009, all items required to be disclosed under
Form 8-K were reported.





PART
III




ITEM 10.
            DIRECTORS, EXECUTIVE OFFICERS AND
      CORPORATE GOVERNANCE




Information
concerning our officers and directors follows.




Name
              
              Age
              
              PositionRobert
      McNulty
              
              63
              
              Chief
      Executive Officer and a DirectorMark
      V. Noffke
              
              54
              
              Executive
      V.P., Finance and Chief Financial OfficerJimmy
      “Bo” White
              
              36
              
              Executive
      V. P. of OperationsMurray
      Williams
              
              39
              
              DirectorMichael
      Warsinske
              
              47
              
              DirectorBarry
      Falk
              
              47
              
              DirectorRon
      Loveless
              
              65
              
              Director





The
following describes the backgrounds of current directors and the key members of
the management team. The persons who acted as officers and directors of
Boomj.com, Inc. prior to the Merger of this company with Reel Estate Services,
Inc.  on December 28, 2007 resigned effective upon the Merger. All of
our officers and directors also currently hold the same offices with Boomj.com,
Inc. and LocalAdLink, Inc., our two wholly-owned subsidiaries.  With
the exception of Mr. Warsinske and Mr. Falk, all of our officers and directors
assumed their current offices with Beyond Commerce, Inc. upon the closing of the
Merger on December 27, 2007.




Robert J. McNulty,
  Chairman / CEO.Mr. McNulty has been Chief Executive Officer
and a director of the Company since December 2007 and Chief Executive Officer
and a director of Boomj.com, Inc. since its formation in January 2007. From
January 1999 to January 2007 Mr. McNulty was self-employed as a consultant. Mr.
McNulty is an accomplished entrepreneur with over 25 years of significant
experience in specialty retail, E-commerce, branded consumer products, retail
start-ups and developing new concepts and technology platforms for utilization
in the retail industry. Mr. McNulty founded Shopping.com in November 1996 and
served as its President and CEO from 1996 until its merger with Compaq Computer
Corporation in January of 1999. Shopping.com was the first on-line retailer
selling a broad range of consumer brand name products on the Internet, which was
purchased for $220 million in an all cash transaction by Compaq Computers. Mr.
McNulty also founded Home Club (also known as Home Base), in 1983 and served as
its Chairman and CEO from 1983 until its merger with  Zayre Corp. in
1986. Home Club was a chain of home improvement warehouse stores for contractor
trade and do-it-yourself customers, servicing U.S. western states with 38 stores
and 7,000 employees. He was the first to institute and implement the “everyday
low price strategy” in the U.S. Home Improvement industry. Mr. McNulty was a
founding board member of the Home Center Industry Council for the City of Hope
Cancer Research Center. Currently, he serves as Chairman of Global Leadership
Connection, a charitable organization that provides leadership programs for high
school students and supports the education of today’s youth leaders across
America.




~ 25
~


Mark V. Noffke,   Executive
Vice President and CFO.Mr. Noffke has been the Company’s CFO since
January 2007. From August 2006 to December 2006, Mr. Noffke was the CFO of
Financial Media Group, Inc. From May 2004 to August 2006, Mr. Noffke was CFO of
National Storm Management, Inc. where he was responsible for taking the company
public. From August 2003 to May 2004, Mr. Noffke was a Managing Director of
Striker Pacific Corporation, an investment bank, where he conducted due
diligence, and acquisition analysis in various industries, including waste
recycling, forest products and automotive. From September 1996 to August 2003,
Mr. Noffke served as the CFO and a Director of U.S. Forest Industries, Inc., a
timber manufacturing company, where he was responsible for developing the
company's accounting infrastructure. From January 2002 to May 2004, Mr. Noffke
served as CFO of Brands Shopping Network, a publicly traded company currently
known as United Fuel and Energy Corporation. In this position, Mr. Noffke was
responsible for raising capital and developing the accounting infrastructure.
Mr. Noffke is a Certified Public Accountant and has a B.S. in Accounting from
Valparaiso University in Northwestern Indiana.




Jimmy’ Bo’ White, Executive Vice
President/ Operations, Technology.Mr. White has 17 years of experience
in both retail management and online technology and has served as an owner and
managing partner of Click Here Publishing, LLC, an Internet design and
development company, since its formation in 1994.  Mr. White is a
successful entrepreneur owning and operating several technology-based companies
specializing in website development, application development, and Internet
marketing.  Mr. White is a specialist in implementing and developing online
technologies. He joined Beyond Commerce in late 2008 as a technology consultant
helping to drive the direction of online products.   Mr. White
also brings years of experience in managing IT and creating Web-based software
to maximize efficiencies.  Mr. White attended Louisiana State
University, majoring in information technology.




Ron Loveless , Director.Mr. Loveless has been a director of the Company since April 2009. Mr.
Loveless is a retired executive of the world’s largest retailer, Wal-Mart
Stores, Inc. (NYSE:WMT).  Ron served four years in the US Air Force
Intelligence Service and began his career with Wal-Mart in 1964.  He
accelerated through the operations ranks, serving as assist. Mgr, Store Manager,
District Manager and Regional Vice-President.  In 1980, he was named
General Merchandise Manager of Wal-Mart’s Hardlines Merchandising
Division.  In 1983, he was named as the first CEO of the new Sam’s
Wholesale Club Division and achieved over $1.5 billion in sales with 30 units in
just three years of operation.   Since leaving Wal-Mart, Mr. Loveless
has consulted in retailing and consumer products with numerous projects in
Canada, the U.S. and the Middle East  He has also been recognized in Sam
Walton’s book as a key executive in the growth of Wal-Mart.





Barry Falk , Director. Mr.
Falk has been a director of the Company since December 2008. Mr. Falk has broad
experience in structuring complex financing transactions in diversified
industries, including the telecommunications, specialty finance, software and
hardware technologies, distribution and retail sectors.  Mr. Falk is an
attorney and specializes in corporate and securities law, with an emphasis on
business planning, venture capital and mergers and acquisitions. Prior to
joining the firm Irvine Venture Law Firm, Mr. Falk worked for the U.S.
Securities and Exchange Commission’s Division of Corporation Finance from 1990
through 1993 where he was the senior disclosure attorney for the SEC’s Pacific
Region and in the SEC’s Division of Enforcement from 1988 through1990. 
Prior to completing his law degree, Mr. Falk worked as an accountant for a
national public accounting firm.  Mr. Falk is an investor in several
venture capital and angel funds and is active on the board of directors of
several private companies.  Mr. Falk received his J.D. degree from Loyola
Law School, Los Angeles and his B.S. degree in Accounting from Kean College of
New Jersey.




Michael Warsinske , Director.
Mr. Warsinske has been a director of the Company since September 2008. Mr.
Warsinske is an online media sales executive and since January 2007 Mr.
Warsinske has been CEO of OverAd Media, a digital media sales firm.  He is
a founder and CEO of Cybereps, an early online advertising sales company which
launched advertising sales for IMDB.com, Advertising.com, Andover.net,
Reuters.com and eMarketer.com. Cybereps grew to 100 employees in 7 offices and
was sold to Interep (Nasdaq: IREP) in 2001.  Mr. Warsinske also co-founded
Wordcents, an early contextual advertising network sold to YBrant Digital. He
currently advises digital media startups, including Information Strategies,
Inc., CMBS.com, FlatFeeConferencing.com, Newsforce.com and
Friend2Friend.com.  Mr. Warsinske has 25 years of experience in online and
traditional media sales.




Murray Williams , Director.
Mr. Williams has been a director of the Company since June 2007. Mr. Williams is
a CPA with 5 years experience in public accounting and 11 years experience as
CFO of various public and private companies.  Mr. Williams began his career
in public accounting with KPMG where he was a manager in their assurance
practice managing a team of over 20 professionals specializing in financial
services, with an emphasis on public offerings, private financings, and mergers
and acquisitions.  Mr. Williams resigned from KPMG in 1997 to become one of
the founding members of Buy.com, Inc., which grew to be the second largest
e-commerce company in the world during his tenure.  He developed the
finance, legal, business development, and human resource departments of Buy.com,
securing over $225 million in private financing, and was the primary driver in
the initial public offering process that generated proceeds of an additional
$192 million.  Mr. Williams also obtained vast international business
experience managing Buy.com’s international expansion into Europe, Canada,
and Australia.  In addition, he successfully completed three acquisitions
for Buy.com and was responsible for their expansion into eleven core product
categories.  After leaving Buy.com in August of 2001, Mr. Williams became
an active entrepreneur creating and investing in numerous companies, and worked
for an investment banking firm as interim CFO on various private companies to
convert them into publicly traded entities.  Mr. Williams has helped take
seven companies public and helped raise over $500 million for the various
companies. From June 2005 to February 2007, Mr. Williams was Chief Financial
Officer at Interactive Television Networks, Inc., a public company and a leading
provider of Internet Protocol Television hardware, programming software and
interactive networks.   Since March 14, 2008, Mr. Williams has been
the Chief Financial Officer, Treasurer and Secretary of GTX Corp., a public
company engaged in the commercialization of miniaturized assisted GPS tracking
and cellular location-transmitting technologies.   Mr. Williams
received degrees in both Accounting and Real Estate from the University of
Wisconsin-Madison.


~ 26
~




There are
no family relationships between any of the officers and directors.





Audit
Committee




Our board
of directors has a standing Audit Committee currently composed of Messrs. Falk
and Williams.  Our board of directors has determined that Mr.
Williams, one of the independent directors serving on our Audit Committee, also
is an “audit committee financial expert” as defined by the SEC’s
rules.  Mr. Williams has provided consulting services to this company
and, accordingly, may not qualify as an “independent” member of the Audit
Committee.  Our board of directors has determined that Mr. Falk is
“independent” under the current independence standards of both Nasdaq and the
SEC.




Code
of Ethics




Our Board
of Directors has adopted a code of ethics covering all of our executive officers
and key employees.  A copy of our code of ethics will be furnished
without charge to any person upon written request.  Requests should be
sent to:  Secretary, Beyond Commerce, Inc., 9029 South Pecos, Suite
2800 Henderson, Nevada 89074.




Compensation
Committee




Our
Compensation Committee currently is comprised of Mr. McNulty and Mr.
Warsinske.




Directors
Compensation




The
directors of the Company do not receive any cash compensation.  However, in
2008, two of our new Directors received options to purchase 100,000 shares
of common stock for their services, and in 2009 a third director received
options to purchase 100,000 shares of common stock for services. These options
will vest over two years, with 50% vesting after one year from the grant date
and the remaining 50% vesting on the second anniversary date.   The
Company does reimburse the Board of Directors for their actual expenses incurred
in attending Board meetings.




Compliance
with Section 16(a) of the Exchange Act




Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and
directors, and persons who own more than ten percent of its Common Stock, to
file reports of ownership and changes of ownership with the Securities and
Exchange Commission (“SEC”) and each exchange on which our securities are
registered. Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish us with copies of all ownership forms they
file.




Based
solely on its review of the copies of such forms received by us, or written
representations from the officers, directors, or persons holding greater than
10% of our common stock, all forms that were required to be filed were timely
submitted to the SEC.




ITEM 11.
            EXECUTIVE
      COMPENSATION




The table
set forth below summarizes the annual and long-term compensation for services in
all capacities paid to our executive officers during the years ending December
31, 2009, 2008 and 2007.  On December 27, 2007, Beyond Commerce, Inc.
acquired Boomj.com, Inc., our primary operating subsidiary during 2007 and
2008.  Beyond Commerce did not pay any compensation to any of its
officers or directors during 2007.  The table below sets forth all
compensation paid (i) by Boomj.com, Inc. in 2007 and (ii) by either Beyond
Commerce, Inc. or Boomj.com, Inc. in 2009 and 2008, to Robert McNulty and Mark
Noffke, the only individuals who served as our principal executive and financial
officers during the year ended December 31, 2009, and to our three other most
highly compensated executive officers who were serving as executive officers as
of December 31, 2009.




~ 27
~





Name and Principle Position
                                (in dollars)
                              
                              Fiscal
                                Year
                              
                              Salary
                                (1)
                              
                              
                              Bonus
                                (2)
                              
                              
                              Restricted
                                Stock
                                Awards
                                (3)
                              
                              
                              All Other
                                Compensation
                                (4)
                              
                              
                              TotalRobert
      J. McNulty
                              
                              2009
                              
                              $
                              191,192
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              191,192President
      and CEO
                              
                              2008
                              
                              $
                              171,692
                              
                              
                              
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              171,692Wendy
      Borow-Johnson
                              
                              2009
                              
                              $
                              18,000
                              
                              
                              
                              -
                              
                              
                              $
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              18,000President—Media
      (6)
                              
                              2008
                              
                              $
                              185,538
                              
                              
                              
                              
                              
                              
                              $
                              118,125
                              
                              
                              
                              -
                              
                              
                              $
                              303,663Mark
      V. Noffke
                              
                              2009
                              
                              $
                              169,157
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              169,157Chief
      Financial Officer
                              
                              2008
                              
                              $
                              164,927
                              
                              
                              
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              164,927Mark
      Doumani Sr.
                              
                              2009
                              
                              $
                              13,333
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              13,333VP
      Business Development (5)
                              
                              2008
                              
                              $
                              164,927
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              -
                              
                              
                              $
                              164,927Jimmy
      “Bo” White (7)
                              
                              2009
                              
                              $
                              100,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              100,500Executive
      Vice President/
                                Operations,
      Technology





(1)
            The
      dollar value of base salary (cash and non-cash)
  earned.




(2)
            The
      dollar value of bonus (cash and non-cash) earned. There are no anticipated
      bonus awards for 2009.




(3)
            During
      the periods covered by the table, the value of the shares of restricted
      stock issued as compensation for services to the persons listed in the
      table.




(4)
            All
      other compensation received that we could not properly report in any other
      column of the table.




(5)
            Mr.
      Doumani resigned as VP Business Development effective January 31,
      2009.




(6)
            Ms.
      Johnson resigned as President—Media in October
  2009.




(7)
            Mr.
      White joined the Company as Executive Vice President/ Operations,
      Technology in January 2009.




Outstanding
Equity Awards at Fiscal Year-End




None of
the executive officers named in the above Summary Compensation Table (i)
received any options during fiscal 2009, (ii) owned any vested or unvested stock
options on December 31, 2009, or (iii) received any stock awards or equity
incentive plan awards during fiscal 2009 that had not vested.




We have
established a stock option compensation incentive plan, and have as of
12/31/2009 issued our employees a total of 2,771,000 options at a strike price
ranging from $0.10-$1.70 per share. Of those granted options, 686,700 have
expired leaving the total employee options outstanding as of December 31, 2009
at 2,084,300.





Director
Compensation




We
reimburse our directors for expenses incurred in connection with attending board
meetings.  We did not pay director’s fees or other cash compensation
for services rendered to our directors in the year ended December 31, 2008 or
2009.




We
currently have no other formal plan for compensating our directors for their
service in their capacity as directors, although our Board of Directors has
recently granted options to purchase common shares to new directors upon joining
the Board of Directors. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our Board of Directors. Our Board of Directors may award special
remuneration to any director undertaking any special services on behalf of our
company other than services ordinarily required of a director.




~ 28
~





The
following table summarizes the compensation of each of our directors who is not
also a named executive officer for their service as a director for the fiscal
year ended December 31, 2009.




DIRECTOR
COMPENSATION




Name
                
                Fees
                  Earned
                  or Paid
                  in Cash
                  ($)
                
                
                Stock
                  Awards
                  ($)
                
                
                Option
                  Awards
                  ($)(1)
                
                
                Non-Equity
                  Incentive Plan
                  Compensation
                  ($)
                
                
                All Other
                  Compensation
                  ($)
                
                
                Total
                  ($)Michael
      Warsinske
                
                
                -0-
                
                
                
                -0-
                
                
                $
                -0-
                
                
                
                N/A
                
                
                
                N/A
                
                
                $
                -0-Barry
      Falk
                
                
                -0-
                
                
                
                -0-
                
                
                $
                -0-
                
                
                
                N/A
                
                
                
                N/A
                
                
                $
                -0-Murray
      Williams
                
                $
                37,114
                (2)
                
                
                -0-
                
                
                
                -0-
                
                
                
                N/A
                
                
                
                N/A
                
                
                $
                37,114Ron
      Loveless (3)
                
                
                -0-
                
                
                
                -0-
                
                
                $
                86,100
                
                
                
                N/A
                
                
                
                N/A
                
                
                $
                86,100Paul
      Morrison (4)
                
                $
                -0-
                
                
                
                -0-
                
                
                
                -0-
                
                
                
                N/A
                
                
                
                N/A
                
                
                
                -0-




(1)
            This
      column represents the dollar amount recognized for financial statement
      reporting purposes with respect to the 2009 fiscal year for the fair value
      of stock options granted to the named director in fiscal year 2009, in
      accordance with SFAS 123R.  Pursuant to SEC rules, the amounts
      shown exclude the impact of estimated forfeitures related to service-based
      vesting conditions.  These amounts reflect our accounting
      expense for these awards, and do not correspond to the actual value that
      will be recognized from these awards by the named
  director.




(2)
            At
      the request of the Board, during 2009, Mr. Williams provided additional
      services to the Company by monitoring and supervising certain of the
      Company’s activities.  These fees were paid to Mr. William’s
      company, FA Corp.




(3)
            We
      agreed to grant Mr. Loveless a ten-year non-qualified option to purchase
      100,000 shares of the Company’s common stock at an exercise price of $0.70
      per share at the time that he joined our Board of Directors in April of
      2009. One half of the foregoing options will vest upon the first
      anniversary of the appointment of Mr. Loveless to the Board, and the
      second half of the options will vest upon the second anniversary of the
      appointment.




(4)
            Mr.
      Morrison joined the Board in July 2009 pursuant to an agreement with
      OmniReliant Holdings, Inc. under which OmniReliant Holdings, Inc. invested
      in the Company. Mr. Morrison resigned as a Board member on January 21,
      2010. Mr. Morrison did not receive any compensation for his services as a
      Board member of Beyond Commerce,
Inc.




Employment
Contracts




None.




Equity
Incentive Plan




On
September 11, 2008, our Board of Directors adopted Beyond Commerce’s 2008 Equity
Incentive Plan, and on June 12, 2009 the Board amended the plan to increase the
number of shares of common stock that may be issued under the plan from
3,500,000 to 7,000,000.   Effective April 1, 2010, the Board of
Directors further increased the number of shares issuable under the 2008 Equity
Incentive Plan by 10,000,000 to a total of 17,000,000 shares.  On July
24, 2009 the Plan was submitted to, and  approval by our stockholders
at the 2009 Annual Meeting of stockholders.  Under the 2008 Equity
Incentive Plan, we are currently authorized to grant options, restricted stock
and stock appreciation rights to purchase up to 17,000,000 shares of common
stock to our employees, officers, directors, consultants and
advisors.  Awards under the plan may consist of stock options (both
non- qualified options and options intended to qualify as “Incentive Stock
Options” under Section 422 of the Internal Revenue Code of 1986, as amended),
restricted stock awards and stock appreciation rights.




~ 29
~





The 2008
Equity Incentive Plan is administered by our Board of Directors or a committee
appointed by the Board, which determines the persons to whom awards will be
granted, the type of award to be granted, the number of awards to be granted and
the specific terms of each grant, including the vesting thereof, subject to the
provisions of the plan.




The 2008
Equity Incentive Plan provides that the exercise price of each incentive stock
option may not be less than the fair market value of our common stock on the
date of grant (or 110% of the fair market value in the case of a grantee holding
more than 10% of our outstanding common stock).  The exercise price of
a non-qualified stock option shall be no less than the fair market value of the
common stock on the date of grant.  The maximum number of options that
may be granted in any fiscal year to any participant is 5,000,000.




The plan
also permits the grant of freestanding stock appreciation rights or in tandem
with option awards. The grant price of a stock appreciation right shall be no
less than the fair market value of a share on the date of grant of the stock
appreciation right. No stock appreciation right shall be exercisable later than
the tenth anniversary of its grant. Upon the exercise of a stock appreciation
right, a participant shall be entitled to receive common stock at a fair market
value equal to the benefit to be received by the exercise.





The plan
also provides us with the ability to grant or sell shares of common stock that
are subject to certain transferability, forfeiture, repurchase or other
restrictions.  The type of restriction, the number of shares of
restricted stock granted and other such provisions shall be determined by our
Board of Directors or its committee.




Unless
otherwise determined by our Board of Directors or its committee, awards granted
under the 2008 Equity Incentive Plan are not transferable other than by will or
by the laws of descent and distribution.




The 2008
Equity Incentive Plan provides that, except as set forth in an individual award
agreement, upon the occurrence of a corporate transaction: (1) our Board of
Directors or its committee shall notify each participant at least thirty (30)
days prior to the consummation of the corporate transaction or as soon as may be
practicable and (2) all options and stock appreciation rights shall terminate
and all restricted stock shall be forfeited immediately prior to the
consummation of such corporate transaction unless the committee determines
otherwise in its sole discretion.  A “corporate transaction” means (1)
a liquidation or dissolution of the company; (2) a merger or consolidation of
the company with or into another corporation or entity (other than a merger with
a wholly-owned subsidiary); or (3) a sale of all or substantially all of the
assets of the company.




Our Board
of Directors may alter, amend or terminate the plan in any respect at any time,
but no alteration, amendment or termination will adversely affect in any
material way any award previously granted under the plan, without the written
consent of the participant holding such award.




Long-Term
Incentive Plans - Awards in Last Fiscal Year




None.




Employee
Pension, Profit Sharing or Other Retirement Plans




None.




ITEM 12.
            SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND
MANAGEMENT




Based
solely upon information made available to us, the following table sets forth
information with respect to the beneficial ownership of our common stock as of
April 15, 2010 by (1) each person who is known by us to beneficially own more
than five percent of our common stock; (2) each of our directors; (3) the named
executive officers listed in the Summary Compensation Table under Item 11; and
(4) all of our executive officers and directors as a group.  Shares of
common stock subject to any warrants or options that are presently exercisable,
or exercisable within 60 days of April 15, 2010 (which are indicated by
footnote) are deemed outstanding for the purpose of computing the percentage
ownership of the person holding the warrants or options, but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person. The percentage ownership reflected in the table is based on 59,493,311
shares of our common stock outstanding as of April 15, 2010. Except as otherwise
indicated, the holders listed below have sole voting and investment power with
respect to all shares of common stock shown, subject to applicable community
property laws. An asterisk represents beneficial ownership of less than
1%.




~ 30
~




Name and Address
                                      
                                      Number of Shares
                                        Beneficially
                                        Owned
                                      
                                      
                                      Percentage
                                        of ClassMark
      V. Noffke
                                      
                                      
                                      31,408
                                      
                                      
                                      
                                      *
                                      %Murray
      Williams
                                      
                                      
                                      202,000
                                      
                                      
                                      
                                      *
                                      %Michael
      Warsinske(2)
                                      
                                      
                                      -Ron
      Loveless (2)
                                      
                                      
                                      -Barry
      Falk(2)
                                      
                                      
                                      202,000
                                      
                                      
                                      
                                      *Robert
      J. McNulty
                                      
                                      
                                      505,000
                                      
                                      
                                      
                                      .85
                                      %Jimmy
      “Bo” White
                                      
                                      
                                      30,714
                                      
                                      
                                      
                                      *Vicis
      Capital Master Fund (4)
                                      
                                      
                                      73,085,961445
      Park Avenue, 16th Floor, New York, NY 10022Zurvita
      Holdings (4)
                                      
                                      
                                      8,000,000
                                      
                                      
                                      
                                      13.4
                                      %800
      Gessner Houston, TX 77024OmniReliant
      Holdings (4)
                                      
                                      
                                      65,085,96114375
      Myerlake Circle Clearwater, FL 33760All
      executive officers and directors as a group (7 persons)
                                      
                                      
                                      971,122
                                      
                                      
                                      
                                      1.63
                                      %Linlithgow
      Holdings, LLC (3)
                                        9029
      S. Pecos Henderson, NV 89074
                                      
                                      
                                      30,907,300
                                      
                                      
                                      
                                      52.57
                                      %





Unless
otherwise indicated, the address of each of the foregoing persons is 9029 South
Pecos, Suite 2800, and Henderson, Nevada 89074.





(1)
            Includes 1,212,000 shares owned
      by MIK Irrevocable Trust, an irrevocable trust for the benefit of
      Mr. Doumani. Mr. Doumani resigned as VP Business Development
      effective January 31, 2009.




(2)
            All of the shares applicable are
      subject to options.




(3)
            Represent shares owned by
      Linlithgow Holdings, LLC, an entity owned and controlled by immediate
      family members of Mr. Robert J. McNulty. Mr. McNulty is not a member or
      manager of Linlithgow Holdings LLC and he disclaims any beneficial
      interests in these shares. Mr. McNulty does not exercise any voting rights
      in respect of these shares nor does he have any right to dispose of these
      shares. .  Linlithgow Holdings, LLC is also considered the
      beneficial owner of 13,333,330 shares through its ownership of $1,333,333
      convertible note that currently can be converted at $0.10 per share and
      warrants to acquire 6,592,300 shares of our common stock at exercise
      prices ranging from $0.01 to $0.10 per
  share.




(4)
            The
      following information is taken from the latest Form 10-K filed by Zurvita
      Holdings and OmniReliant Holdings regarding — beneficial ownership for
      Zurvita Holdings and OmniReliant Holdings.  Zurvita Holdings is
      beneficially owned 50% by Vicis Capital Master Fund and 23% by OmniReliant
      Holdings.  OmniReliant Holdings is beneficially owned 95.8% by
      Vicis Capital Master Fund.  Accordingly, Vicis Capital Master
      Fund is deemed to beneficially own all shares owned and all of the
      securities that could be converted into our shares by Zurvita and
      OmniReliant.




Zurvita
Holdings acquired 8,000,000 shares of the Company’s common stock in a series of
Purchases in connection with the sale of the assets of our Local Ad Link
subsidiary.  OmniReliant is considered the beneficial owner of
65,085,961 through its ownership of $1,623,322 of our convertible promissory
notes whose conversion price is currently $0.10 per share and warrants to
acquire 48,852,741 shares of our common stock at an exercise price of $0.10 per
share.




~ 31
~





ITEM  13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS





Our full
board of directors is responsible for reviewing and approving or ratifying all
related party transactions.  Although there is no written policy in
this regard, it is the practice of our board to review all material facts of
interested transactions and take into account, among other factors it determines
appropriate, whether the interested transaction is on terms no less favorable
than terms generally available to any similarly situated, unrelated third
parties under the same or similar circumstances and the extent of the person’s
interest in the transaction.  Additionally, board approval of any
interested party transaction must include the affirmative vote of at least a
majority of our non-employee directors.   We have since January
1, 2009 been involved in the following related party transactions, each of which
was reviewed and approved by our full board of directors:


Related
Party Transactions
  We have
related party transaction with Linlithgow Holdings, LLC, an entity that owns
approximately 19% of our outstanding common stock. Linlithgow Holdings is a
family trust of the McNulty family. Mr. McNulty, our Chief Executive Officer has
no voting control over the holdings of Linlithgow Holdings and disclaims
beneficial ownership of the shares owned by Linlithgow Holdings.


·
            The
      Company permits TAC Financial, Inc. to use some of its facilities at its
      Nevada headquarters.  TAC Financial has not paid the Company for
      the use of the facilities.  In 2009, the Company commenced
      paying the commissions it owed to its LocalAdLink independent consultants
      through the use TAC Financials VISA debit card.  The Company
      does not pay TAC Financial for loading payments onto the debit cards,
      although the card holders are charged fees for the use of the debit
      cards.  Linlithgow Holdings, LLC currently owns over 85% of the
      issued and outstanding shares of TAC Financial.  Linlithgow
      Holdings, LLC is the largest shareholder of this Company and is a family
      trust of the McNulty family.  Mr. McNulty, our Chief Executive
      Officer has no voting control over the holdings of Linlithgow Holdings and
      disclaims beneficial ownership of the shares owned by Linlithgow
      Holdings.  Two members of TAC Financials Board of Directors are
      the sons of Robert McNulty (our Chief Executive Officer).  We no
      longer own LocalAdLink and, as a result, no longer engage in any
      transactions with TAC Financial.




·
            On May 20, 2009, the Company
      executed a convertible promissory note (the “Note”) in the principal
      amount of $1,600,000 payable to Linlithgow Holdings.  Pursuant
      to the Note, the Company promises to pay to Linlithgow Holdings $1,600,000
      in cash on November 20, 2009. A principal payment was made on July 21,
      2009 of $266,667 leaving a balance of $1,333,333. The Note is convertible
      at any time at a conversion price of $1.00 per share which was reset to
      $0.70 due to a subsequent offering.  The Note bears an initial
      interest rate of 1.5% for the first month and increases by 1.5% per month
      until maturity. After the maturity date, the default rate of interest
      becomes 18% per month or the highest rate allowed by law, whichever is
      lower, until the date the Note amount is actually paid. Further, as part
      of the consideration provided to the holder for the Note, the Holder also
      received a warrant for the purchase of up to 1,782,000 shares of the
      Company’s common stock at an exercise price of $0.90 per share. The
      warrants are exercisable, in whole or in part, any time from and after the
      date of issuance of the warrant. Due to a subsequent ratchet adjustment
      based on the issuance of warrants at a lower per share price, the exercise
      price of these warrants has been adjusted to $0.70. and the convertible
      note ratcheted down to $0.10 per share. This note was subsequently
      extended by mutual agreement until May 20, 2010. As part of the extension
      the interest rate was reduced to 6.0% and the conversion price was
      ratcheted down to $0.10 per share. In consideration for this extension, we
      granted Linlithgow 6,400,000 warrants to purchase our common stock at
      $0.10.




·
            During 2009 and 2008, we paid
      Linlithgow Holdings a total of $215,213 and $53,450 respectively for
      consulting services and advertising commissions rendered to
      us.




·
            In 2009 & 2008, we paid FA
      Corp. a total of $37,114 and  $102,673 respectively for various
      services provided to us by Mr. Murray Williams.  Mr. Williams is
      a member of our Board of Directors and the principal stockholder of FA
      Corp.  Another one of our directors Mr. Barry Falk is a partner in
      the law firm Irvine Venture Law Firm.  The
      Company paid $425 in 2009 and $336 in 2008 for legal services provided to
      the Company by Mr. Falk’s firm.




·
            We also have related party
      transactions with the Omni group and Zurvita, which the two have related
      ownership.  In 2009 we sold 8,000,000 shares of the Company
      common stock to Zurvita for $800,000 giving them a 13.6% ownership in the
      Company.  This transaction was part of the asset sale of
      LocalAdLink. (Exhibit 10.37).  We have an
      outstanding  secured promissory note at December 31,
      2009  with the Omni Group (who has common ownership with
      Zurvita) of $1,623,322.




Director
Independence




Although
a majority of our Board of Directors is comprised of non-employee directors,
only one half of our board is comprised of “independent” directors as defined in
Rule 4200(a)(15) of the Market place Rules of the NASDAQ Stock
Market.  Our independent directors are Barry Falk, Michael Warsinske
and Ron Loveless.  Through FA Corp., a consulting company affiliated
with Murray Williams, we paid Mr. Williams a total of $37,114 in
2009.  We also paid $425 in 2009 for legal services provided to the
Company by Mr. Falk’s firm.  However, our board determined that the
small amount of fees we paid to Mr. Falk’s law firm during 2009 did not prevent
it from reaching a determination that Mr. Falk is independent.  Robert
McNulty, our chief executive officer, is not an independent
director.


~ 32
~




ITEM 14.
            PRINCIPAL ACCOUNTANT FEES AND
      SERVICES




Aggregate
fees billed to us by L J Soldinger Associates, LLC, our principal accountants,
for professional services rendered with respect to our 2009 and 2008 fiscal
years were as follows:




Year
      ended
                    December
      31,2009
                  
                  
                  2008Audit
      Fees
                  
                  $
                  218,000
                  
                  
                  $
                  209,000Audit-Related
      Fees
                  
                  $
                  47,200
                  
                  
                  $Tax
      Fees
                  
                  $
                  25,000
                  
                  
                  $
                  20,000All
      Other Fees
                  
                  $
                  —
                  
                  
                  
                  —





Audit
fees represent fees billed for professional services provided in connection with
the audit of the Company’s annual financial statements, reviews of its quarterly
financial statements, audit services provided in connection with statutory and
regulatory filings for those years and audit services provided in connection
with securities registration and/or other issues resulting from that
process.




Audit
related fees pertains to professional services provided in connection with
registration statements.





The Audit
Committee requires that prior to the engagement of the Company’s principal
accountant to audit the financial statements of the Company or to perform other
Audit Related or Non-Audit Related services, the engagement be reviewed to
consider the scope of services to be rendered and the expected fees to be
charged by the principal accountant in connection with rendering such
services.




PART
IV




ITEM 15.
            EXHIBITS AND FINANCIAL STATEMENT
      SCHEDULES




THE
FINANCIAL STATEMENTS OF BEYOND COMMERCE, INC. ARE LISTED ON THE INDEX TO
FINANCIAL STATEMENTS AS SET FORTH ON PAGE F-2.




The
following list describes the exhibits filed as part of this Annual Report Form
10-K.





Exhibit No.
              
              Description3.1
              
              Articles
      of Incorporation (1)3.2
              
              Amendment
      to Articles of  Incorporation (name
change)(2)3.3
              
              Bylaws
      (1)4.1
              
              Form
      of Series A Common Stock Purchase Warrant(4)5.1
              
              Opinion
      of Sichenzia Ross Friedman Ference LLP10.1
              
              Agreement
      and Plan of Reorganization (3)10.2
              
              Employment
      Agreement Wendy Borow-Johnson (13)10.3
              
              Property
      Lease - Santa Ana, California (3)10.4
              
              Property
      Lease - Henderson, Nevada (3)10.5
              
              2008
      Equity Incentive Plan (12)10.6
              
              Form
      of Incentive Stock Option Agreement (12)10.7
              
              Form
      of Non-Qualified Stock Option Agreement (12)10.8
              
              Form
      of Subscription Agreement by and among the Company and the Subscribers
      named therein. (4)10.9
              
              Form
      of Secured Convertible Note. (4)10.10
              
              Form
      of Guaranty, dated July 7, 2008, by BoomJ.com, Inc. (4)10.11
              
              Collateral
      Agent Agreement, dated as of July 7, 2008, by and among BoomJ.com, Inc.,
      the Subscribers and the Company. (4)10.12
              
              Form
      of Security Agreement, dated July 7, 2008, between the Company and the
      Subscribers(4)




~ 33
~




10.13
              
              Secured
      Original Issue Discount Promissory Note, due November 16, 2009
      (5)10.14
              
              Common
      Stock Purchase Warrant, dated May 20, 2009 (5)10.15
              
              Security
      Interest and Pledge Agreement, dated May 20, 2009, between Linlithgow
      Holdings LLC and the Company (5)10.16
              
              Purchase
      Agreement, dated June 17, 2009, between the Company and OmniReliant
      Holdings, Inc. (6)10.17
              
              Secured
      Original Issue Discount Promissory Note due June 17, 2009
    (6)10.18
              
              Common
      Stock Purchase Warrant, dated June 17, 2009 (6)10.19
              
              Security
      Interest and Pledge Agreement, dated June 17, 2009, among OmniReliant
      Holdings, Inc., the Company, and Linlithgow Holdings LLC
    (6)10.20
              
              Amended
      and Restated Securities Purchase Agreement, dated July 2, 2009, between
      the Company and OmniReliant Holdings, Inc. (7)10.21
              
              Original
      Issue Discount Secured Convertible Debenture, due July 2, 2010
      (7)10.22
              
              Common
      Stock Purchase Warrant, dated July 2, 2009 (7)10.23
              
              Amended
      and Restated Pledge and Security Agreement, dated July 2, 2009, among the
      Company and the Pledgors named therein in favor of OmniReliant Holdings,
      Inc. (7)10.24
              
              Security
      Agreement, dated July 2, 2009, among the Company, the Company’s
      subsidiaries, and the Secured Parties named therein (7)10.25
              
              Subsidiary
      Guarantee, dated July 2, 2009, by the Guarantors named therein in favor of
      OmniReliant Holdings, Inc. (7)10.26
              
              Amended
      and Restated Securities Purchase Agreement, dated July 10, 2009, between
      the Company and OmniReliant Holdings, Inc. (8)10.27
              
              Original
      Issue Discount Secured Convertible Debenture, due July 10, 2010
      (8)10.28
              
              Common
      Stock Purchase Warrant, dated July 10, 2009 (8)10.29
              
              Original
      Issue Discount Secured Convertible Debenture, due July 21, 2010
      (9)10.30
              
              Common
      Stock Purchase Warrant, dated July 21, 2009 (9)10.31
              
              Securities
      Purchase Agreement, dated July 30, 2009, between the Company and
      OmniReliant Holdings, Inc. (10)10.32
              
              Original
      Issue Discount Secured Convertible Debenture, due July 30, 2010
      (10)10.33
              
              Common
      Stock Purchase Warrant, dated July 30, 2009 (10)10.34
              
              Security
      Interest and Pledge Agreement, dated July 30, 2009, between OmniReliant
      Holdings, Inc. and the Company (10)10.35
              
              Agreement,
      dated July 30, 2009, between the Company and St. George Investments, LLC
      (11)10.36
              
              Asset
      Purchase Agreement, dated October 9, 2009, between the Company, Local Ad
      Link, Inc. and OmniReliant Holdings, Inc. (14)10.37
              
              Securities
      Purchase Agreement, dated October 9, 2009, between the Company and Zurvita
      Holdings, Inc. (14)31.1
              
              Certification
      of Chief Executive Officer31.2
              
              Certification
      of Chief Financial Officer (Principal Accounting
  Officer)32.1
              
              Certification
      of Chief Executive Officer and Chief Financial Officer (Principal
      Accounting Officer) pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002, 18 U.S.C. Section 135031.1
              
              Certification
      of Chief Executive Officer




(1)    Previously
filed as an exhibit to the Company’s Registration Statement filed on January 22,
2007, which exhibit is hereby incorporated herein by
reference.


(2)    Previously
filed as an exhibit to the Company’s Annual Report Form 10-KSB filed , February
7, 2008), which exhibit is hereby incorporated herein by
reference.


(3)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on January 4,
2008, which exhibit is hereby incorporated herein by
reference.


(4)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on July 11,
2008, which exhibit is hereby incorporated herein by
reference.


(5)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on May 21, 2009,
which exhibit is hereby incorporated herein by reference.


(6)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on June 23,
2009, which exhibit is hereby incorporated herein by
reference.


(7)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on July 6, 2009,
which exhibit is hereby incorporated herein by reference.


(8)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on July 16,
2009, which exhibit is hereby incorporated herein by
reference.


(9)    Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on July 22,
2009, which exhibit is hereby incorporated herein by
reference.


(10)  Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on August 4,
2009, which exhibit is hereby incorporated herein by
reference.


(11)  Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on August 5,
2009, which exhibit is hereby incorporated herein by
reference.


(12)  Previously
filed as an exhibit to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008, filed with the SEC on April 3, 2009, which exhibit is
hereby incorporated herein by reference.


(13) 
Previously filed as an exhibit to the Company’s Annual Report on Form 10-KSB for
the year ended December 31, 2007, filed with the SEC on April 4, 2008, which
exhibit is hereby incorporated herein by reference.


(14)  Previously
filed as an exhibit to the Company’s Current Report on Form 8-K on October
16, 2009, which exhibit is hereby incorporated herein by
reference.




~ 34
~




SIGNATURES




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




BEYOND
      COMMERCE, INC.Date:  April
      19, 2010
                By:
                /s/ ROBERT MCNULTYRobert
      McNultyChief
      Executive Officer




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




Signature
                      
                      Title
                      
                      Date/s/ ROBERT MCNULTY
                      
                      President,
      Chief Executive Officer and
                      
                      April
      19, 2010Robert
      McNulty
                      
                      Director
      (Principal Executive Officer)/s/ MARK NOFFKE
                      
                      Chief
      Financial Officer
                      
                      April
      19, 2010Mark
      V. Noffke
                      
                      (Principal
      Financial and Accounting Officer)/s/ MICHAEL WARSINKE
                      
                      Director
                      
                      April
      19, 2010Michael
      Warsinske/s/ BARRY FALK
                      
                      Director
                      
                      April
      19, 2010Barry
      Falk/s/ MURRAY WILLIAMS
                      
                      Director
                      
                      April
      19, 2010Murray
      Williams





/s/ RON LOVELESS
            
            Director
            
            April
      19, 2010Ron
      Loveless




~ 35
~





BEYOND
COMMERCE, INC.





TABLE OF
CONTENTS




PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                            F-1CONSOLIDATED
      BALANCE SHEETS AS OF DECEMBER 31, 2009 & 2008
                            F-2CONSOLIDATED
      STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2009 &
      2008
                            F-3CONSOLIDATED
      STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 &
      2008
                            F-4CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED
      DECEMBER 31,2009, 2008 &2007
                            F-5NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                            F-6


~ 36
~





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and


Stockholders
of Beyond Commerce, Inc.





We have
audited the accompanying consolidated balance sheets of Beyond Commerce, Inc. as
of December 31, 2009 and 2008, and the related consolidated statements of
operations, stockholders’ deficit, and cash flows for the years then
ended.  These consolidated financial statements are the responsibility of
the company’s management.  Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.





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





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Beyond Commerce, Inc. as of
December 31, 2009 and 2008, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company reflected a loss of approximately $11,656,030
and $13,595,294 in 2009 and 2008, respectively and will need to raise additional
capital to fund operations in 2010. These conditions raise substantial doubt
about its ability to continue as a going concern. Management’s plans regarding
those matters also are described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.




As
discussed in Note 18 to the financial statements, management changed its policy
for determining whether an instrument (or embedded feature) is indexed to the
Company’s own stock. As required by generally accepted accounting principles the
Company retroactively applied the accounting change to 2008.


/s/ L J Soldinger Associates,
      LLCDeer
      Park, IllinoisApril
      19, 2010




F-1







BEYOND
COMMERCE, INC.


CONSOLIDATED
BALANCE SHEETS


As
of December 31,





2009
                                          
                                          
                                          2008(as
      adjusted)(See Note 18)ASSETSCurrent
      assets :Cash
                                          
                                          $
                                          7,205
                                          
                                          
                                          $
                                          100,086Accounts
      receivable
                                          
                                          
                                          10,697
                                          
                                          
                                          
                                          226,091Prepaid
      loan cost
                                          
                                          
                                          33,681
                                          
                                          
                                          
                                          562,665Prepaid
      loan cost – related party
                                          
                                          
                                          37,889
                                          
                                          
                                          
                                          -Other
      current assets
                                          
                                          
                                          518,677
                                          
                                          
                                          
                                          306,285Total
      current assets
                                          
                                          $
                                          608,149
                                          
                                          
                                          $
                                          1,195,127Property,
      website and computer equipment
                                          
                                          
                                          1,051,558
                                          
                                          
                                          
                                          871,180Less:
      Accumulated depreciation and amortization
                                          
                                          
                                          (517,571
                                          )
                                          
                                          
                                          (320,366
                                          )Property,
      website and computer equipment – net
                                          
                                          $
                                          533,987
                                          
                                          
                                          $
                                          550,814Other
      Assets
                                          
                                          
                                          62,204
                                          
                                          
                                          
                                          60,067Total
      assets
                                          
                                          $
                                          1,204,340
                                          
                                          
                                          $
                                          1,806,008LIABILITIES AND STOCKHOLDERS’
      DEFICITCurrent
      liabilities:Short
      term borrowings
                                          
                                          $
                                          3,400,000
                                          
                                          
                                          $
                                          2,400,555Short
      term borrowings - related party
                                          
                                          
                                          2,180,533
                                          
                                          
                                          
                                          -Accounts
      payable
                                          
                                          
                                          2,251,951
                                          
                                          
                                          
                                          1,490,590Accounts
      payable - related party
                                          
                                          
                                          26,396
                                          
                                          
                                          
                                          19,552Note
      derivative liability
                                          
                                          
                                          180,632
                                          
                                          
                                          
                                          3,396,935Note
      derivative liability – related party
                                          
                                          
                                          2,425,473
                                          
                                          
                                          
                                          -Other
      current liabilities
                                          
                                          
                                          2,207,830
                                          
                                          
                                          
                                          1,374,534Other
      current liabilities – related party
                                          
                                          
                                          251,386
                                          
                                          
                                          
                                          -Deferred
      Revenue
                                          
                                          
                                          756,262
                                          
                                          
                                          
                                          609,987Total
      current liabilities
                                          
                                          $
                                          13,680,463
                                          
                                          
                                          $
                                          9,292,153Commitments
      and contingencies
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          —Stockholders’
      Deficit :Common
      stock, $0.001 par value, 200,000,000 and 75,000,000 shares authorized as
      of December 31, 2009 and 2008, respectively, and 58,793,311and 40,936,143
      issued and outstanding at December 31, 2009 and 2008,
      respectively
                                          
                                          $
                                          58,793
                                          
                                          
                                          $
                                          40,936Preferred
      stock,$.001 par value of 50,000,000 shares authorized and no shares
      issued
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Additional
      paid in capital
                                          
                                          
                                          17,744,799
                                          
                                          
                                          
                                          11,096,604Accumulated
      deficit
                                          
                                          
                                          (30,279,715
                                          )
                                          
                                          
                                          (18,623,685
                                          )Total
      stockholders' deficit
                                          
                                          $
                                          (12,476,123
                                          )
                                          
                                          $
                                          (7,486,145
                                          )Total
      Liabilities and Stockholders' Deficit
                                          
                                          $
                                          1,204,340
                                          
                                          
                                          $
                                          1,806,008





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


F-2





BEYOND
COMMERCE, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS





For the Year
                                                ended
                                                December 31,
                                              
                                              
                                              For the Year
                                                ended
                                                December 31,2009
                                              
                                              
                                              2008(as
      adjusted)(Note 18)RevenuesLicense
      & membership, net
                                              
                                              $
                                              808,257
                                              
                                              
                                              $
                                              -Merchandise
      sales, net
                                              
                                              
                                              95,595
                                              
                                              
                                              
                                              1,060,272Total
      Revenue
                                              
                                              $
                                              903,852
                                              
                                              
                                              $
                                              1,060,272Operating
      expensesCost
      of products sold, net
                                              
                                              $
                                              221,744
                                              
                                              
                                              $
                                              1,083,374Selling
      general & administrative
                                              
                                              
                                              5,116,743
                                              
                                              
                                              
                                              6,239,956Selling
      general & administrative – related party
                                              
                                              
                                              211,450
                                              
                                              
                                              
                                              -Professional
      fees
                                              
                                              
                                              1,931,796
                                              
                                              
                                              
                                              1,217,673Professional
      fees – related party
                                              
                                              
                                              127,118
                                              
                                              
                                              
                                              102,673Depreciation
      and amortization
                                              
                                              
                                              198,873
                                              
                                              
                                              
                                              181,134Total
      costs and operating expenses
                                              
                                              $
                                              7,807,724
                                              
                                              
                                              $
                                              8,824,810Loss
      from operations
                                              
                                              
                                              (6,903,872
                                              )
                                              
                                              
                                              (7,764,538
                                              )Non-operating
      income (expense)Interest
      expense
                                              
                                              
                                              (6,408,153
                                              )
                                              
                                              
                                              (3,325,662
                                              )Interest
      expense – related party
                                              
                                              
                                              (2,177,051
                                              )
                                              
                                              
                                              -Income/expense
      related to derivative
                                              
                                              
                                              3,173,214
                                              
                                              
                                              
                                              (1,490,052
                                              )Income
      related to derivative – related party
                                              
                                              
                                              3,206,669
                                              
                                              
                                              
                                              -Interest
      income
                                              
                                              
                                              -
                                              
                                              
                                              
                                              542Miscellaneous
      Income
                                              
                                              
                                              13,600
                                              
                                              
                                              
                                              -Gain
      from sale of assets
                                              
                                              
                                              5,020,402
                                              
                                              
                                              
                                              -Total
      non-operating Income (expense)
                                              
                                              $
                                              2,828,681
                                              
                                              
                                              $
                                              (4,815,172
                                              )Loss
      from continuing operations before income taxes
                                              
                                              
                                              (4,075,191
                                              )
                                              
                                              
                                              (12,579,710
                                              )Loss from discontinued
      operations net of income taxes
                                              
                                              
                                              (7,580,839
                                              )
                                              
                                              
                                              (1,015,584
                                              )Provision
      for income tax
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Net loss
                                              
                                              $
                                              (11,656,030
                                              )
                                              
                                              $
                                              (13,595,294
                                              )Net (loss) per common share –
      basic and diluted
                                              
                                              $
                                              (0.25
                                              )
                                              
                                              $
                                              (0.35
                                              )Net
      (loss) per common share -basic and diluted - continuing
      operations
                                              
                                              $
                                              (0.09
                                              )
                                              
                                              $
                                              (0.32
                                              )Net
      (loss) per common share -basic and diluted - discontinued
      operations
                                              
                                              $
                                              (0.16
                                              )
                                              
                                              $
                                              (0.03
                                              )Weighted
      average number of common shares outstanding
                                              
                                              $
                                              46,681,672
                                              
                                              
                                              $
                                              38,580,296





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


F-3





BEYOND
COMMERCE, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


Audited


For the Years Ended
                                                        December 31,2009
                                                      
                                                      
                                                      2008(as
      adjusted)
                                                        (Note
      18)Net
      loss
                                                      
                                                      $
                                                      (11,656,030
                                                      )
                                                      
                                                      $
                                                      (13,595,294
                                                      )Net
      loss from discontinued operations, net of taxes
                                                      
                                                      
                                                      (7,580,839
                                                      )
                                                      
                                                      
                                                      (1,015,583
                                                      )Cash
      flows from operating activities:Loss
      from continuing operations
                                                      
                                                      
                                                      (4,075,191
                                                      )
                                                      
                                                      
                                                      (12,579,711
                                                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Gain
      on sale of assets
                                                      
                                                      
                                                      (5,020,402
                                                      )
                                                      
                                                      
                                                      -Non-cash
      interest
                                                      
                                                      
                                                      7,791,100
                                                      
                                                      
                                                      
                                                      2,485,957Depreciation
      and amortization
                                                      
                                                      
                                                      198,871
                                                      
                                                      
                                                      
                                                      181,134Stock
      issued for professional services
                                                      
                                                      
                                                      867,272
                                                      
                                                      
                                                      
                                                      1,703,459Warrants
      issued for note extensions
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      -Change
      in derivative liability
                                                      
                                                      
                                                      (6,379,883
                                                      )
                                                      
                                                      
                                                      1,490,052Stock
      options issued for compensation
                                                      
                                                      
                                                      1,909,701
                                                      
                                                      
                                                      
                                                      -Stock
      issued for compensation
                                                      
                                                      
                                                      345,616
                                                      
                                                      
                                                      
                                                      -Warrants
      issued for professional fees
                                                      
                                                      
                                                      34,618
                                                      
                                                      
                                                      
                                                      -Changes
      in assets and liabilities:(Increase)
      decrease in accounts receivable
                                                      
                                                      
                                                      21,274
                                                      
                                                      
                                                      
                                                      (5,577
                                                      )(Increase)
      decrease in prepaid loan cost and other assets
                                                      
                                                      
                                                      (52,372
                                                      )
                                                      
                                                      
                                                      11,573Increase
      (decrease) in accounts payable
                                                      
                                                      
                                                      355,147
                                                      
                                                      
                                                      
                                                      393,644Increase
      (decrease) in accounts payable - related party
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (25,448
                                                      )Increase
      (decrease) in other current liabilities
                                                      
                                                      
                                                      1,476,970
                                                      
                                                      
                                                      
                                                      880,429Deferred
      Revenue
                                                      
                                                      
                                                      285,881
                                                      
                                                      
                                                      
                                                      -Net
      cash used in operating activities.
                                                      
                                                      $
                                                      (2,241,398
                                                      )
                                                      
                                                      $
                                                      (5,464,488
                                                      )Cash
      flows from investing activities:Cash
      paid to purchase property, website and computer
    equipment
                                                      
                                                      $
                                                      (96,155
                                                      )
                                                      
                                                      $
                                                      (112,310
                                                      )Net
      cash used in investing activities.
                                                      
                                                      $
                                                      (96,155
                                                      )
                                                      
                                                      $
                                                      (112,310
                                                      )Cash
      flows from financing activities:Proceeds
      from common stock issuance
                                                      
                                                      $
                                                      820,000
                                                      
                                                      
                                                      $
                                                      721,966Cash
      received from short term borrowings
                                                      
                                                      
                                                      1,460,000
                                                      
                                                      
                                                      
                                                      6,213,232Cash
      received from short term borrowings - related party
                                                      
                                                      
                                                      7,470,000
                                                      
                                                      
                                                      
                                                      -Cash
      paid on short term borrowings - related party
                                                      
                                                      
                                                      (1,391,667
                                                      )
                                                      
                                                      
                                                      (25,000
                                                      )Cash
      paid on short term borrowings
                                                      
                                                      
                                                      (266,280
                                                      )
                                                      
                                                      
                                                      (636,500
                                                      )Cash
      paid for financing fees
                                                      
                                                      
                                                      (750,000
                                                      )
                                                      
                                                      
                                                      (422,000
                                                      )Net
      cash provided by financing activities.
                                                      
                                                      $
                                                      7,342,053
                                                      
                                                      
                                                      $
                                                      5,851,698Discontinued
      activities:Net
      cash used in operating activities
                                                      
                                                      
                                                      (4,587,446
                                                      )
                                                      
                                                      
                                                      (276,061
                                                      )Net
      cash used in investing activities
                                                      
                                                      
                                                      (509,935
                                                      )
                                                      
                                                      
                                                      (10,000
                                                      )Net
      cash flows from assets disposed
                                                      
                                                      
                                                      (5,097,381
                                                      )
                                                      
                                                      
                                                      (286,061
                                                      )Net
      (decrease) in cash & cash equivalents
                                                      
                                                      
                                                      (92,881
                                                      )
                                                      
                                                      
                                                      (11,161
                                                      )Cash
      & cash equivalents, beginning balance
                                                      
                                                      
                                                      100,086
                                                      
                                                      
                                                      
                                                      111,247Cash
      & cash equivalents, ending balance
                                                      
                                                      $
                                                      7,205
                                                      
                                                      
                                                      $
                                                      100,086




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


F-4


BEYOND
COMMERCE, INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIT





Common Stock
                                
                                
                                Preferred Stock
                                
                                
                                AdditionalShares
                                
                                
                                Par
                                  Value
                                
                                
                                Shares
                                
                                
                                Par
                                  Value
                                
                                
                                Paid-In
                                  Capital
                                
                                
                                Accumulated
                                  Deficit
                                
                                
                                Stockholders’
                                  EquityBalance,
      December 31, 2007
                                
                                
                                36,108,067
                                
                                
                                
                                36,108
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                3,914,155
                                
                                
                                
                                (5,028,391
                                )
                                
                                $
                                (1,078,128
                                )Common
      stock sold - net of costs
                                
                                
                                793,986
                                
                                
                                
                                794
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                719,245
                                
                                
                                
                                —
                                
                                
                                
                                720,039Common
      stock issued in relation to debt
                                
                                
                                855,000
                                
                                
                                
                                855
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                255,645
                                
                                
                                
                                —
                                
                                
                                
                                256,500Common
      stock issued in relation to debt conversion
                                
                                
                                1,686,530
                                
                                
                                
                                1,687
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                1,659,842
                                
                                
                                
                                —
                                
                                
                                
                                1,661,529Common
      stock issued for services
                                
                                
                                918,240
                                
                                
                                
                                918
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                1,686,872
                                
                                
                                
                                —
                                
                                
                                
                                1,687,790Cashless
      stock warrant exercises
                                
                                
                                574,320
                                
                                
                                
                                574
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                (574
                                )
                                
                                
                                —
                                
                                
                                
                                —Stock
      and options issued for compensation
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                748,956
                                
                                
                                
                                —
                                
                                
                                
                                748,956Warrants
      issued in connection with debt
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                2,883,366
                                
                                
                                
                                —
                                
                                
                                
                                2,883,366Derivative
      on note discounts
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (770,903
                                )
                                
                                
                                
                                
                                
                                
                                (770,903
                                )Net
      loss (as adjusted)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (13,595,294
                                )
                                
                                
                                (13,595,294
                                )Balance,
      December 31, 2008(as adjusted)
                                
                                
                                40,936,143
                                
                                
                                $
                                40,936
                                
                                
                                
                                0
                                
                                
                                $
                                -
                                
                                
                                $
                                11,096,604
                                
                                
                                $
                                (18,623,685
                                )
                                
                                $
                                (7,486,145
                                )Common
      stock sold - net of costs
                                
                                
                                8,025,000
                                
                                
                                
                                8,025
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                811,975
                                
                                
                                
                                
                                
                                
                                
                                820,000Common
      stock issued in relation to debt conversion
                                
                                
                                6,622,740
                                
                                
                                
                                6,623
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                2,871,530
                                
                                
                                
                                
                                
                                
                                
                                2,878,153Common
      stock issued for services
                                
                                
                                2,574,000
                                
                                
                                
                                2,574
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                864,698
                                
                                
                                
                                
                                
                                
                                
                                867,272Cashless
      stock warrant exercises
                                
                                
                                360,950
                                
                                
                                
                                361
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (361
                                )
                                
                                
                                
                                
                                
                                
                                -Stock
      and options issued for compensation
                                
                                
                                274,500
                                
                                
                                
                                274
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                345,341
                                
                                
                                
                                
                                
                                
                                
                                345,615Warrants
      issued in connection with debt extension
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                624,799
                                
                                
                                
                                
                                
                                
                                
                                624,799Warrants
      issued in connection with debt
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                3,179,489
                                
                                
                                
                                
                                
                                
                                
                                3,179,489Stock
      sold in debt pay down – officer stock
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                607,934
                                
                                
                                
                                
                                
                                
                                
                                607,934Convertible
      securities in excess of authorized
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (4,610,000
                                )
                                
                                
                                -
                                
                                
                                
                                (4,610,000
                                )Stock
      options issued for compensation
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,909,702
                                
                                
                                
                                
                                
                                
                                
                                1,909,702Warrants
      issued against derivative liability
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                43,088
                                
                                
                                
                                
                                
                                
                                
                                43,088Net
      loss
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (11,656,030
                                )
                                
                                
                                (11,656,030
                                )Balance,
      December 31, 2009
                                
                                
                                58,793,333
                                
                                
                                $
                                58,793
                                
                                
                                
                                0
                                
                                
                                $
                                -
                                
                                
                                $
                                17,744,799
                                
                                
                                $
                                (30,279,715
                                )
                                
                                $
                                (12,476,123
                                )





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


F-5


BEYOND
COMMERCE, INC.


NOTES
TO CONDENSED FINANCIAL STATEMENTS




NOTE
1  DESCRIPTION OF BUSINESS AND BASIS OF
PRESENTATION





Beyond
Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”, and “we”), is an
Internet company that has two interrelated business models aimed at generating
revenues primarily from Web site advertising and E-commerce transactions. 
Our initial business wasBOOMj.com, Inc.,www.BOOMj.com , a
niche portal and social networking site for Baby Boomers and Generation
Jones.  Our BOOMj.com Web site provides social, political, financial, and
lifestyle content to the Baby Boomer/Generation Jones target audience as a
platform for our advertising and E-commerce businesses. OurLocalAdLink subsidiary
operates a website, a local search directory and advertising network that brings
local advertising to geo-targeted consumers.  On October 9, 2009,
LocalAdLink Inc., a wholly-owned subsidiary of the Company sold its LocalAdLink
Software (the “Software”) and all of their assets related to the Software
including the rights to the name LocalAdLink, the LocalAdLink trademark,
the  Web site,www.LocalAdLink.com  , and a local search directory
and advertising network that brings local advertising to geo-targeted
consumers.  The Company will continue to sell advertising as it had prior
to inception of Local Ad Link, Inc., however on a different scale with a greater
emphasis on business to business sales.





During
the second quarter we relaunched  i-SUPPLY, www.i-SUPPLY.com,
an online storefront that offers easy to use, fully customizable E-commerce
services, and revenue solutions for any third party Web site large or small, and
hosts local ads, providing extensive reach for our proprietary advertising
partner network platform.  During the third quarter of 2009 the Company
started another subsidiary, KaChing KaChing, which is an E-commerce platform
that provides a complete turn-key E-commerce solution. Individual KaChing
KaChing on line store owners have the ability to create, manage and earn money
from product sales generated from their individual Web stores.




History
of the Company




The
Company, formerly known as Reel Estate Services, Inc. (“RES”), was incorporated
in Nevada on January 12, 2006.  As of December 28, 2007, RES was a public
shell company, defined by the Securities and Exchange Commission as an inactive,
publicly quoted company with nominal assets and liabilities. Subsequent to
the Merger, RES changed its name to Boomj, Inc.





In
December 2008, the Company changed its name once again from BOOMj, Inc. to
Beyond Commerce, Inc. to more accurately reflect the new structure of the
Company consisting at that point in time of two operating divisions:
BOOMj.com dba i-SUPPLY and until its assets were sold, LocalAdLink,
Inc. (see Note 18).





The
Company currently maintains its corporate office in Henderson,
Nevada.





NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Basis
of Presentation





Management
is responsible for the fair presentation of the Company’s financial statements,
prepared in accordance with U.S. generally accepted accounting principles (GAAP)
and principles of consolidations.




Principles
of Consolidation





The
consolidated financial statements include the accounts of the Company and its
subsidiaries: Local Ad Link, Inc., Boomj.com and KaChing KaChing, Inc.  All
significant intercompany transactions and accounts have been eliminated upon
consolidation.





Use
of Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Estimates are used in the
determination of depreciation and amortization and the valuation for non-cash
issuances of equity instruments, and the website, income taxes and
contingencies, among others.


F-6





Cash
and Cash Equivalents





The
Company classifies as cash and cash equivalents amounts on deposit in banks and
cash temporarily in various instruments with original maturities of three months
or less at the time of purchase. The Company’s cash management system is
integrated within three separate banking institutions.




Accounts
Receivable





Accounts
receivable consists primarily of credit card charges which are collected within
one to five days.




Fair
Value of Financial Instruments





The
carrying value of the current assets and liabilities approximate fair value due
to their relatively short maturities except for certain of the short-term
borrowings which are net of a $776,122 debt discount in 2009 and
$2,527,945  in 2008.





Reclassifications





Certain
comparative amounts from prior periods have been reclassified to conform to the
current year's presentation. These changes did not affect previously reported
net loss.




Segment
Information





The
Company’s Operations Are Classified Into three Principal Reportable Segments:
Internet retail store, its e-commerce operations (BOOMj.com
dba  i-SUPPLY), an e-commerce Store Licensing business KaChing
KaChing, Inc. and  internet advertising (Local Ad Link)





Property,
Website and Computer Equipment





Property,
website and computer equipment are stated at cost less accumulated
depreciation.  Expenditures for maintenance and repairs are charged to
income as incurred.  Additions, improvements and major replacements that
extend the life of the asset are capitalized. The initial cost of the Boomj.com
website has been capitalized. Once the site began operating, costs to maintain
the site are expensed as incurred.  The cost and accumulated depreciation
and amortization related to assets sold or retired are removed from the accounts
and any gain or loss is credited or charged to income in the period of
disposal.





The
Company accounts for web site costs in accordance FASB Accounting Standards
Codification (“FASC”). Costs
associated with the web site application and infrastructure development stage
are capitalized.  Amortization of costs commences once the web site is
ready for its intended use which occurred when the website was launched in
2007.





For
financial reporting purposes, depreciation and amortization is provided on the
straight-line method over the estimated useful lives of depreciable
assets.  Financial reporting provisions for depreciation and amortization
are generally based on the following annual rates and estimated useful
lives:





Type of Asset
                    
                    Rates
                    
                    YearsComputer
      equipment and property
                    
                    20%
      - 50%
                    
                    2 -
      5 yearsWebsite
      Development Costs
                    
                    20%
                    
                    5
      yearsLeasehold
      improvements
                      (or
      life of lease where shorter)
                    
                    20%
      - 50%
                    
                    2 -
      5 years




Income
Taxes





The
Company will account for income taxes under FASC 740-10-30.  Deferred
income tax assets and liabilities are determined based upon differences between
the financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.  Deferred tax assets are reduced by a valuation
allowance to the extent management concludes it is more likely than not that the
assets will not be realized.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the statements of operations in the period that includes
the enactment date.


F-7





The
Company follows the guidance of FASC 740-10-25 in determinating
whether tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements.  The Company may recognize the
tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position.  The tax
benefits recognized in the financial statements from such a position should be
measured based on the largest benefit that has a greater than fifty percent
(50%) likelihood of being realized upon ultimate settlement.  The
Company had no material adjustments to its liabilities for unrecognized income
tax benefits.





Revenue
Recognition





The
Company generates its revenue from products, store licensing and advertising
sold on its internet websites. The BOOMj.com store’s and i-SUPPLY’s database has
available close to two million name brand products. These items include books,
digital cameras, kitchen and bath items and office supplies. Revenue from Store
Licenses allows members to access and display on their individual website the
Company’s proprietary database I- supply.  This retail storefront
environment offers easy to use, fully customizable E-commerce services, and
revenue solutions for any third party website large or small, and hosts local
ads, providing extensive reach for our proprietary advertising partner network
platform.





Revenue
is also generated from advertising products consist of web-banner advertising,
which are continuous or rotating. Delivery of these profiles is based on the
number of impressionsof an advertisement that
a customer purchases. An impression is a single instance of an Internet user
viewing the page that contains a customer's name and/or logo. Revenue is
recognized on such advertising programs based on the proportionate units of
advertising delivered over the period of a media campaign. The Company also sold
a marketing kit through their Local Ad Link division.  The kit was
comprised of ten one month duration ads. The sales reps had the option to sell
the ten ads as a commissionable sale or to give them away as a free promotional
tool.





The
Company follows FASC 605-10-S99-1 for revenue recognition.  The
Company recognizes revenue when it is realized or realizable and earned.
 The Company considers revenue realized or realizable and earned when all
of the following criteria are met: (i) persuasive evidence of an arrangement
exists, (ii) the product has been shipped or the services have been rendered to
the customer, (iii) the sales price is fixed or determinable, and (iv)
collectability is reasonably assured. In
connection with advertising revenue, the Company receives certain upfront fees a
portion of which they defer recognition in accordance with FASB accounting
guidance and SEC Staff Accounting Bulletin 104.




Corresponding
revenue origination costs are accounted for under the guidance provided in SAB
104.




Revenue
is recorded net of discounts, allowances, and estimated returns.




Stock
Based Compensation





The
Company from time to time, may issue compensatory stock options or shares to
employees, consultants, and other service providers under its 2008 Equity
incentive plan. In some cases, it has issued compensatory warrants to service
providers outside the 2008 Equity incentive plan. The Company issues new shares
of its Common stock when employees or service providers exercise options or
warrants. All
equity-based compensation awarded has been determined under the fair value
provisions of ASC 718. This compensation is then expensed over the vesting
period of the underlying award. Additionally, for all equity-based compensation
awarded prior to the adoption date, compensation for the portion of awards for
which the requisite service is performed after the adoption date is recognized
as service is rendered.




Stock-based
compensation for awards granted to non-employees is periodically remeasured as
the underlying options and warrants vest. The Company recognizes an expense for
such awards throughout the performance period as the services are provided by
the non-employees, based on the fair value of these options and warrants at each
reporting period.


F-8




The
Company estimates the fair value of stock issuances based on the closing market
value of the Company’s stock on the date of grant.





Concentration
of Credit Risk





Financial
instruments that potentially subject the Company to concentrations of credit
risk consists principally of cash deposits at financial institutions.  At
various times during the year, the Company may exceed the federally insured
limits. To mitigate this risk, the Company places its cash deposits only with
high credit quality institutions.  Management believes the risk of loss is
minimal.





Impairment
of Long-lived Assets





The
Company accounts for long-lived assets in accordance with the provisions of FASC
360-10-35-21, Accounting for the Impairment of Long-Lived Assets. This statement
requires that long-lived assets and certain identifiable intangibles be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. Fair values are determined based on
quoted market value, discounted cash flows or internal and external appraisals,
as applicable. During 2009 and 2008, the Company did not recognize any
impairment charges.





Employee
Benefits





The
Company currently offers employees vacation benefits and recently began offering
a healthcare plan. During 2009, the shareholders approved the 2008 Equity
Incentive Plan at the shareholder annual meeting held on July 24,
2009.




Inventories





The
Company does not carry any inventory and has its vendors or distributors ship
directly to the consumer based on confirmed orders provided electronically by
the Company.




Valuation
of Derivative Instruments
 
 US
GAAP requires that embedded derivative instruments be bifurcated and
assessed, along with free-standing derivative instruments such as warrants and
non-employee stock-options to determine whether they should be considered a
derivative liability and subject to re-measurement at their fair value. In
estimating the appropriate fair value, the Company uses both binomial and
Black Scholes models, depending on the complexity and terms of the specific
embedded or free-standing derivative.
 
 Fair
Value Measurements
 
 The
Company applies the fair value hierarchy as established by US
GAAP.  Assets and liabilities recorded at fair value in the
consolidated balance sheets are categorized based upon the level of judgment
associated with the inputs used to measure the fair value as
follows.
 
 ·
              Level 1 – quoted prices in active
      markets for identical assets or
  liabilities.
  ·
              Level 2 – other significant
      observable inputs for the assets or liabilities through corroboration with
      market data at the measurement
date.
 
 ·
              Level 3 – significant
      unobservable inputs that reflect management’s best estimate of what market
      participants would use to price the assets or liabilities at the
      measurement date.
 
 Management
considers all of its derivative liabilities to be Level 3
liabilities.  There were no movements between levels during 2009 or
2008.  At December 31, 2009 and 2008 the Company had outstanding
derivative liabilities, including those from related parties (see Notes 8, 9 and
18) of $2,606,105and $3,396,935.





Recent
Accounting Pronouncements




In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
new accounting guidance related to fair value measurements and related
disclosures. This new guidance defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements. We
adopted this new guidance on January 1, 2008, as required for our financial
assets and financial liabilities. However, the FASB deferred the effective date
of this new guidance for one year as it relates to fair value measurement
requirements for nonfinancial assets and nonfinancial liabilities that are not
recognized or disclosed at fair value on a recurring basis. We adopted these
remaining provisions on January 1, 2009. The adoption of this accounting
guidance did not have a material impact on our consolidated financial
statements.




In
December 2007, the FASB issued new accounting guidance that defines collaborative arrangements and establishes reporting
requirements for transactions between participants in a collaborative
arrangement and between participants in the arrangement and third parties. It
also establishes the appropriate income statement presentation and
classification for joint operating activities and payments between participants,
as well as the sufficiency of the disclosures related to those arrangements.
This new accounting guidance was effective for us on January 1, 2009, and
its adoption did not have a significant impact on our consolidated financial
statements.




In
December 2007, the FASB issued new accounting guidance related to the
accounting for non-controlling interests in consolidated financial statements.
This guidance establishes accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. This guidance requires that non-controlling interests in
subsidiaries be reported in the equity section of the controlling company’s
balance sheet. It also changes the manner in which the net income of the
subsidiary is reported and disclosed in the controlling company’s income
statement. This guidance is effective for fiscal years beginning after
December 15, 2008. We adopted this guidance on January 1, 2009, and it
had no material impact on our consolidated financial statements.




In
December 2007, the FASB issued new accounting guidance related to business
combinations. The guidance establishes principles and requirements for how an
acquirer entity recognized and measures in its financial statements the
identifiable asset acquired, the liabilities assumed and any controlling
interests in the acquired entity; recognizes and measures the goodwill acquired
in the business combination or a gain from a bargain purchase; and determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business
combination. Costs of the acquisition will be recognized separately from
the business combination. The new guidance was effective for periods beginning
after December 15, 2008. The Company has considered this standard when
evaluating current and potential transactions to which it would
apply.


F-9


In June
2008, the FASB issued new accounting guidance clarifying that non-forfeitable
instruments granted in share-based payment transactions are participating
securities prior to vesting and, therefore, should be included in the earnings
allocation in computing earnings per share under the two-class method. The
two-class method is an earnings allocation formula that treats participating
securities as having the same rights to earnings as available to common
shareholders. The adoption of the new guidance in first quarter 2009 did not
impact reported basic and diluted earnings per share amounts because the company
did not have any non-forfeitable instruments granted in share based payment
transactions.




In
November 2008, the FASB issued new accounting guidance on equity method
investment accounting considerations. The new guidance generally continues
existing practices under the equity method of accounting for investments in
common stock including the use of a cost-accumulation approach to initial
measurement of the investment. The new guidance does not require the investor to
perform a separate impairment test on the underlying assets of an equity method
investment. However, an equity-method investor is required to recognize its
proportionate share of impairment charges recognized by the investee, adjusted
for basis differences, if any, between the investee’s carrying amount for the
impaired assets and the cost allocated to such assets by the investor. The new
guidance is effective for fiscal years beginning on or after December 15,
2008 and interim periods within those fiscal years and shall be applied
prospectively. We adopted the guidance effective January 1, 2009, the
result of which did not have a material impact on the Company since we currently
have no equity method investments.




In
December 2008, the FASB issued new accounting guidance concerning
disclosures about transfers of financial assets and interests in variable
interest entities. The new guidance includes disclosure objectives and requires
public entities to provide additional year-end and interim disclosures about
transfers of financial assets and involvement with variable interest entities.
The requirements apply to transferors, sponsors, servicers, primary
beneficiaries, and holders of significant variable interests in a
variable-interest entity or qualifying special purpose entity. The new guidance
is effective for the first interim period or fiscal year ending after
December 15, 2008. Effective January 1, 2009, we adopted the guidance.
Adoption of these provisions did not have a material impact on the Company’s
consolidated financial statements.




In
April 2009, the FASB issued new accounting guidance on fair value
measurements. The new guidance impacts certain aspects of fair value measurement
and related disclosures. The new guidance was effective beginning in the second
quarter of 2009. The impact of adopting this new guidance did not have a
material effect on the Company’s consolidated results of operations or financial
position.




In
May 2009, the FASB issued new accounting guidance related to the accounting
and disclosures of subsequent events. This guidance incorporates the subsequent
events guidance contained in the auditing standards literature into
authoritative accounting literature. It also requires entities to disclose the
date through which they have evaluated subsequent events and whether the date
corresponds with the release of their financial statements. This guidance is
effective for all interim and annual periods ending after June 15, 2009. We
adopted this guidance upon its issuance and it is discussed in these
consolidated financial statements.




In
June 2009, the FASB issued new accounting guidance related to the
accounting and disclosures for transfers of financial assets. This guidance will
require entities to provide more information about sales of securitized
financial assets and similar transactions, particularly if the seller retains
some risk with respect to the assets. This guidance is effective for fiscal
years beginning after November 15, 2009. The Company adopted the guidance
on January 1, 2010 and it did not have a material impact on the consolidated
financial statements.




In
June 2009, the FASB issued new accounting guidance to improve financial
reporting by companies involved with variable interest entities and to provide
more relevant and reliable information to users of financial statements. This
guidance is effective for fiscal years beginning after November 15, 2009.
We are currently evaluating the impact that the adoption of this guidance will
have on our consolidated financial statements.


F-10


In
June 2009, the Financial Accounting Standards Board (“FASB”) issued new
accounting guidance entitled, “The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles – a replacement of
FASB Statement No. 162” (“ASC”), which identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP. This new guidance is effective for financial
statements issued for interim and annual periods ending after September 15,
2009 and was adopted by the Company during the third quarter of 2009. The
adoption of this guidance has changed how we reference various elements of GAAP
when preparing our financial statement disclosures, but did not have an impact
on the Company’s consolidated financial statements.




In
September 2009, the accounting standard regarding arrangements that include
software elements was updated to require tangible products that contain software
and non-software elements that work together to deliver the products essential
functionality to be evaluated under the accounting standard regarding multiple
deliverable arrangements. This standard update must be adopted no later than
January 1, 2011 and may be adopted prospectively for revenue arrangements
entered into or materially modified after the date of adoption or
retrospectively for all revenue arrangements for all periods presented. We are
currently evaluating the impact this new standard update will have on our
consolidated financial statements.




In
October 2009, the accounting standard regarding multiple deliverable
arrangements was updated to require the use of the relative selling price method
when allocating revenue in these types of arrangements. This method allows
a vendor to use its best estimate of selling price if neither vendor specific
objective evidence nor third party evidence of selling price exists when
evaluating multiple deliverable arrangements. This standard update must be
adopted no later than January 1, 2011 and may be adopted prospectively for
revenue arrangements entered into or materially modified after the date of
adoption or retrospectively for all revenue arrangements for all periods
presented. We are currently evaluating the impact this standard update will have
on our consolidated financial statements.




In
January 2010, the FASB issued new guidance regarding improving disclosures about
fair value measurements. The guidance requires new disclosures related to
transfers in and out of Level 1 and Level 2 as well as activity in Level 3 fair
value measurements. The guidance also provides clarification to existing
disclosures. The new disclosures and clarifications of existing disclosures are
effective for interim and annual reporting periods beginning after
December 15, 2009, except for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after
December 15, 2010, and for interim periods within those fiscal years. Our
effective date for the new disclosures and clarifications is the quarter ending
March 31, 2010. Our effective date for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements is January 1, 2011. When effective, we will comply with the
disclosure provisions of this new guidance.





NOTE
3 - GOING CONCERN





The
Company's financial statements are prepared using generally accepted accounting
principles, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. During the year ended December 31,
2009, the Company generated a consolidated net loss of $11,656,030 (2008 -
$13,595,294) and realized a negative cash flow from operating activities of
$6,828,844 (2008 - $5,740,549).  At the end of 2009, there is an
accumulated deficit of $30,279,715 (2008 - $18,623,685) and a working capital
deficiency of $13,072,314 (2008 - $8,097,026). The Company will need to raise
additional capital and/or obtain financing in the second quarter of 2010 to
continue operations in 2010. In
addition, on January 31, 2010 we were unable to pay our secured convertible
promissory note holders the amounts due to them as the notes had
matured.  Under the terms of the notes, the holders may at any time
elect to notify us of the default and foreclose on essentially all of our
assets.  In addition, the OmniReliant notes contain cross default
provisions, such that those notes are also in default due to our being in
default of the secured convertible promissory notes.  The total amount
outstanding on these notes as of December 31, 2009 was
$5,023,322.  These factors, and our lack of ability to meet our
obligations from current operations, and the need to raise additional capital to
accomplish our objectives, create a substantial doubt about our ability to
continue as a going concern.





Management
is taking steps to raise additional funds to address its operating and financial
cash requirements to continue operations in the next twelve months. Management
has devoted a significant amount of time in the raising of capital from
additional debt and equity financing. However, the Company’s ability to continue
as a going concern is dependent upon raising additional funds through debt and
equity financing and generating revenue. There are no assurances the Company
will receive the necessary funding or generate revenue necessary to fund
operations. If we are unable to obtain additional funds, or if the funds cannot
be obtained on terms favorable to us, we will be required to delay, scale
back or eliminate our plans to continue to develop and expand our operations or
in the extreme situation, cease operations altogether.


F-11





NOTE
4  PROPERTY,
WEBSITE  AND COMPUTER EQUIPMENT





Property
and equipment at December 31, 2009 and 2008 consisted of the
following:




2009
                  
                  
                  2008Office
      and computer equipment
                  
                  $
                  275,122
                  
                  
                  $
                  186,614Website
                  
                  
                  776,436
                  
                  
                  
                  684,566Total
      property, website and computer equipment
                  
                  
                  1,051,558
                  
                  
                  
                  871,180Less:
      accumulated depreciation
                  
                  
                  (517,571
                  )
                  
                  
                  (320,366
                  )$
                  533,987
                  
                  
                  $
                  550,814




Depreciation
and amortization expense for the year ended December 31, 2009 was $255,938,
compared to $182,802for the same period in 2008 of which $197,873 and $181,134
were included in operating expenses in continuing operations for the year ended
Dec. 31, 2009 and 2008, respectively.




NOTE
5  OTHER
ASSETS





Other
      current assets
                        
                        2009
                        
                        
                        2008Prepaid
      commissions
                        
                        $
                        294,872
                        
                        
                        $
                        260,055Credit
      Card processor retention
                        
                        
                        132,606
                        
                        
                        
                        -Other
                        
                        
                        91,199
                        
                        
                        
                        46,230TOTAL
                        
                        $
                        518,677
                        
                        
                        $
                        306,285





Other
current assets reflects the cost of commissions paid where the revenue is being
deferred. This amount is to match the period expense when revenue is actually
earned.  The credit card retention is cash collateral that is being held by
the sundry credit card processor’s to assure compliance with the individual
processor’s policies, procedures, guidelines, and/or practices.





Other
      assets
                  
                  2009
                  
                  
                  2008Rent
      Deposits
                  
                  $
                  31,763
                  
                  
                  $
                  20,828Credit
      Card Reserve
                  
                  
                  20,084
                  
                  
                  
                  33,387Vendor
      Deposit
                  
                  
                  10,357
                  
                  
                  
                  5,852TOTAL
                  
                  $
                  62,204
                  
                  
                  $
                  60,067





Other
assets primarily consisted of rent deposits for the Company's Nevada and Santa
Ana/Irvine offices.





NOTE
6  OTHER CURRENT
LIABILITIES




Other
current liabilities consist of the following at December 31, 2009 and
December 31, 2008:





2009
                          
                          
                          2008Accrued
      interest
                          
                          
                          508,554
                          
                          
                          
                          388,783Accrued
      interest – related party
                          
                          
                          180,720
                          
                          
                          
                          -Accrued
      commission
                          
                          
                          7,272
                          
                          
                          
                          220,869Accrued
      payroll and related expenses
                          
                          
                          523,240
                          
                          
                          
                          399,899Payroll
      tax liability
                          
                          
                          1,018,325
                          
                          
                          
                          226,098Checks
      written in excess of cash balance
                          
                          
                          121,719
                          
                          
                          
                          -Other
                          
                          
                          150,442
                          
                          
                          
                          138,885Other
      – related party
                          
                          
                          70,666
                          
                          
                          
                          -Total
      other current liabilities
                          
                          $
                          2,580,938
                          
                          
                          $
                          1,374,534


F-12





NOTE
7  SHORT TERM
BORROWINGS




12/31/2009
                    
                    
                    12/31/2008Note
      payable to Carole Harder bearing an annual interest rate of 12%,
      unsecured, due 1/31/10*
                    
                    $
                    190,000
                    
                    
                    $
                    140,000Convertible
      Promissory Notes, bearing an annual interest rate of 12%, secured, due
      1/31/10*
                    
                    
                    2,210,000
                    
                    
                    
                    4,280,000Convertible
      Promissory Notes, bearing an annual interest rate of 18%, secured, due
      5/16/10
                    
                    
                    1,333,333
                    
                    
                    
                    -Convertible
      Promissory Notes due 9/9/2010 (original note principle $641,663 and
      original discount of $98,145)**
                    
                    
                    141,663
                    
                    
                    
                    -Convertible
      Promissory Notes due 9/7/2010 (original note discount of
      $41,665)**
                    
                    
                    291,665
                    
                    
                    
                    -Convertible
      Promissory Notes due 9/7/2010 (original note discount of
      $11,666)**
                    
                    
                    116,666
                    
                    
                    
                    -Convertible
      Promissory Notes due 9/7/2010 (original note discount of
      $53,332)**
                    
                    
                    373,332
                    
                    
                    
                    -Convertible
      Promissory Notes due 9/7/2010 (original note discount of
      $99,996)**
                    
                    
                    699,996
                    
                    
                    
                    -Sundry Bridge Notes, bearing an annual
      interest rate 12%, unsecured, due - 1/31/2010*
                    
                    
                    1,000,000
                    
                    
                    
                    508,500Total
      principal
                    
                    $
                    6,356,655
                    
                    
                    $
                    4,928,500Less
      unamortized debt discount
                    
                    
                    (776,122
                    )
                    
                    
                    (2,527,945
                    )Net
      balance
                    
                    $
                    5,580,533
                    
                    
                    $
                    2,400,555





The
above notes listed as Convertible Promissory Note Holders, except for
$1,333,333, have a lien on all the assets of the Company.   * The
above notes with maturity dates on January 31, 2010 are in default as of the
date of these financial statements for failure to pay the principal and accrued
interest at Maturity. ** The above Convertible Preferred Promissory Notes due
OmniReliant Holdings with maturity dates ranging from September 7, 2010 through
September 9, 2010 are also in default under cross-default provisions contained
in those agreements.





On March
21, 2008 the Company issued a 12% Convertible Note to Carole Harder, an
accredited investor in exchange for $140,000 originally due March 20, 2009. In
connection with the note, the Company issued to the investor a five-year warrant
to purchase 200,000 shares of our common stock exercisable at $0.93 per share.
This warrant was valued using the Black–Scholes method at $0.136 per share,
resulting in a total value of $27,288 assuming a fair value per share of $0.30,
risk-free interest rate of 2.50% and 83% volatility index. In addition there is
a conversion option to exchange the amount outstanding into the shares of the
Company’s common stock at a conversion price of $1.00 per share. We allocated
the proceeds from the issuance of this note and the warrants based on the
relative fair value for each item. Consequently, we recorded a discount of
$22,837 on the note, which is being amortized over the term of the note using
the effective interest method resulting in an effective interest rate of
approximately 25%.  The maturity date of this note has been extended
until January 31, 2010.  The company is currently in technical default on
this note.





On
December 28, 2007, RES raised $500,000 in a private offering to accredited
investors of its 12% Secured Convertible one-year promissory notes. These notes
have a voluntary conversion feature to convert into a unit from a contemplated
offering, each unit comprised of (i) one share of stock at $0.70 per unit and
(ii) one warrant to purchase one share of common stock at an exercise price of
$0.93 per share. In addition, on December 28, 2007, the Company issued warrants
to the placement agent as financing fees to purchase 71,429 shares of its common
stock at an exercise price of $0.93 per share.  The warrant vested
immediately and expires in five years. It was valued by the Company at $12,853.
Additional promissory notes in conjunction with this same offering were sold by
the Company on January 25, 2008 and February 8, 2008 for $1,230,000 and
$550,000, respectively. The promissory notes were scheduled to mature on March
31, 2009 which was extended until January 31, 2010.  The company is
currently in technical default of this note. The purchasers of the December 28,
2007, January and February 2008 promissory notes also received warrants to
purchase 3,257,143 shares of our common stock exercisable at $0.93 per share
expiring in 2013, which was valued using the Black–Scholes method at $0.177 per
share. This resulted in a total value of $577,769 assuming a fair value per
share of $0.30, risk-free interest rate range of 3.25% to 5.25% based on the
note issuance and 100% volatility index. Consequently, we recorded a discount of
$460,952 on the notes, which is being amortized over the term of these
notes using the effective interest method with an effective interest rate
between 26% and 27%. In addition, on January 25, 2008 and February 8, 2008, the
Company issued warrants to the placement agent as financing fees to purchase
175,714 and 78,571 respectively, shares of its common stock at an exercise price
of $0.93 per share.  The warrant vested immediately and expires in five
years. These warrants were valued by the Company at $44,882. The Company has
also granted, to these investors, a security interest in all its
assets.


F-13




In
addition to the above terms of the 12% secured convertible promissory notes, the
Company granted to the January and February 2008 note-holders “piggyback”
registration rights with respect to the shares of Common Stock issued or
issuable under those notes and warrants.  The Company also agreed with the
note-holders that in the event all of the shares underlying their warrants have
not otherwise been included in a registration statement filed by the Company
with the SEC on or prior to May 1, 2008, other than for certain specified
reasons, then, as partial relief for the damages to the investors, the Company
shall pay to the noteholders an amount in cash equal to one percent (1.0%) of
the original cash consideration invested by the noteholders for each 30 day
period during which the registration statement is not effective. Since a
registration statement was not filed by June 30, 2008, the Company accrued
$45,000 as a penalty charge. During the fiscal quarter ended September 30, 2008,
this registration obligation and the requirement to pay penalties was waived by
the majority of noteholders and the accrual was reversed.





In
addition, during 2008, the Company raised $2,025,000, in a private offering from
accredited investors.  The securities sold by the Company consisted of its
12% secured convertible promissory notes and warrants to purchase 2,892,858
shares of the Company’s common stock at an exercise price of $0.93 per
share.  The notes are convertible at a price of $0.70 per share, are
secured by a lien on the Company’s assets and on the assets of Boomj.com, Inc.,
and mature on July 31, 2009.  The warrants were valued using the
Black–Scholes method at $0.767per share. This resulted in a total value of
$2,218,822 assuming a fair value per share of $1.00, risk-free interest rate of
3.32% and 100% volatility index.  We allocated the proceeds from
issuance of these notes and warrants based on the relative fair value for each
item.  Consequently, we recorded a discount of $1,135,980 on the notes,
which is being amortized over the term of these notes using the effective
interest rate method.  A discount was also recorded on these convertible
notes based on the requirement to bifurcate the conversion feature as noted
below.  As a result, those convertible notes were recorded with additional
discounts in the total amount of $770,903. The combined value of the note
discount and discount related to the conversion feature on the convertible notes
is being amortized over the term of the respective convertible note using the
effective interest method. The amortization of the discounts was recorded as
interest expense.  Since the discounts represent near 100% of the loan
proceeds from these notes, the effective periodic interest rate for these notes
ranges from between 77% and 86%.  As a result, the majority
of amortization expense will be incurred at the end of the term of the
note.




In 2008,
the Company recorded $316,127 of interest expense related to the amortization of
the discounts and an additional interest expense of $108,208 which was for the
stated interest rate on these notes.  The notes were fully amortized as of
9/30/09. For the twelve months ended December 31, 2009, we recorded
interest expense of approximately $1,725,000 related to amortization of the
discounts. We also recorded an additional interest expense of $148,149 in 2009,
which was for the stated interest rate on these notes.




In
addition the Notes contained several provisions which if triggered would reset
the conversion price of the Notes including; (1) in the event the Company failed
to timely convert or deliver the conversion shares, the Notes went into default
as defined under the agreement or a change of control event, as defined in the
Note agreement, occurred, the holders of the Note could demand immediate cash
payment of the greater of 120% of the outstanding principal plus accrued
interest or the dollar amount equivalent of the number of shares convertible
into at the time of the triggering event multiplied by the closing stock price
of the Company’s common shares; (2) a reset provision such that should the
Company issue in the future any common stock or instruments convertible or
exchangeable into common stock of the Company at a per share price lower than
the then in effect conversion price, would automatically reset the conversion
price of the Notes to that lower price and (3) the Company agreed to reset the
conversion price of the notes based on a formula of meeting certain sales and
income targets in the twelve month period ending June 30, 2009, such that the
conversion price would reset lower by 1% for every 1% of either the revenue or
income targets missed by the Company, with a cap such that the reduction in
price per share could not exceed 50%.





Because
of these provisions, the Company determined that the conversion feature was not
clearly and closely related to the Note host contract and under the FASB
accounting guidance it has bifurcated the conversion feature.  Because the
conversion feature is not considered to be conventional convertible and note
holders have the ability to demand cash settlement of the conversion feature,
the amount recorded has been shown as a liability at December 31, 2009 of
approximately $161,000.  Under the requirements of FASB accounting
guidance, the Company has remeasured the fair value of the conversion feature at
each reporting period after inception, with those changes in fair value being
recorded in the statement of operations.


F-14


The
warrants issued under this Note and Warrant Purchase Agreement also contained
several provisions which if triggered would reset the strike price of the
warrants and also possibly the number of warrant shares to be issued, including
(1) a reset provision such that should the Company issue in the future any
common stock or instruments convertible or exchangeable into common stock of the
Company at a per share price lower than the then in effect conversion price,
would automatically reset the conversion price of the Notes to that lower price
and would also increase the number of shares exercisable and (2) the Company
agreed to reset the conversion price of the notes based on a formula of meeting
certain sales and income targets in the twelve month period ending June 30,
2009, such that the conversion price would reset lower by 1% for every 1% of
either the revenue or income targets missed by the Company, with a cap such that
the reduction in price per share could not exceed 50%.





Because
of these provisions, the Company in 2008 determined that the provisions within
the warrants that could result in the issuance of a variable number of shares
preclude amounts ascribed to the warrants from being included in permanent
equity so long as those provisions are outstanding.  Under the guidance of
Accounting Series Release (“ASR”) 268 and Topic D-98 the Company recorded the
amounts for the warrants under Temporary Equity as of December 31, 2008. 
The Company believes as of the issuance date and the date of these financial
statements that the provisions which would trigger the reset to be remote and
thus has not remeasured the warrants after the date of issuance.  Should
the trigger events become probable, the Company will remeasure the warrants and
any changes will be reported in expense at that time. Both the Notes and
Warrants also contained standard anti-dilution provisions.  In 2009, in
accordance with FASB guidance, the company reclassified the value of the
warrants from Temporary Equity in to the derivative liability (See footnote
18).




The
Company in August 2008 issued warrants to the placement agent to purchase
289,286 shares of its common stock at an exercise price of $0.93 per
share.  The warrants vested immediately and expire in five years. These
warrants were valued by the Company using the Black-Scholes method at $831,872
using a fair value per share of $1.00, risk-free interest rate of 3.32% based on
the note issuance and 100% volatility.





In
October 2008 the Company issued detachable warrants along with a note agreement
with an exercise price of $0.70 per share.  This issuance triggered the
reset provision contained within the warrants above such that the warrant
exercise price reset to $0.70 from $0.93 and the number of shares exercisable
increased to 3,843,364 from 2,892,858.  The Company recorded an additional
discount of $118,000 in 2008 which is being amortized using the effective
interest method




On May
29, 2008, one of the note-holders from the January 2008 investment converted a
$25,000 note including accrued interest of $1,028 into 37,182 shares of the
Company’s common stock.





During
August 2008, the Company paid off a zero coupon note to one of its investors of
$110,000 which $95,000 represented cash received from the prior quarter.




On
September 23, 2008 the Company received $50,000 from an accredited investor as a
90 day Zero Coupon note in which $55,000 was due in December 2008. The
Company made payments of $26,500 in December 2008, and paid the balance in
incremental payments during the first quarter of 2009.




During
2008, the Company entered into several short term (ninety-day) unsecured, 12%
promissory notes with certain accredited investors for a total of $1,508,232.
Along with these notes, the Company issued warrants to purchase 754,116 shares
of common stock at an exercise price of $0.70 expiring in 2013, which was valued
using the Black–Scholes method at $0.192 per share. This resulted in a value
of approximately $144,000 assuming a fair value per share of $0.30,
risk-free interest rate of 3.32% and a 100% volatility index. Consequently, the
Company recorded a discount of $131,865 on the notes, based on the relative fair
value of the warrants, which is being amortized over the term of these notes.
During 2008, all notes plus interest accrued of $36,598 were converted into
1,542,457 shares of common stock.  On August 22, 2008 the Company issued
327,126 shares of the Company’s common stock to another one of our placement
agents as part of their commission in connection with this convertible note
private placement.   In accordance with an agreement with the
placement agent, the number of shares were determined by converting the cost of
services to common stock at $.70 per share.  However, at the time of
settlement, in accordance with generally accepted accounting principles, the
company used the trading price of the stock, which ranged between $2.24 and
$3.27 per share, to convert the liability.  Since the Company initially
recorded an expense of approximately $325,000 for these services, this
settlement resulted in additional  expense
of  $583,893.





During
the third quarter ended September 30, 2008, the Company issued short term
(ninety-day) unsecured, 12% promissory notes to four accredited investors for a
total of $170,000.  Along with these notes, the Company issued warrants to
note holders to purchase 57,500 shares of common stock exercisable at $0.70 per
share expiring in 2013, which was valued using the Black–Scholes method at $0.39
per share. This resulted in a Black–Scholes value of $32,000 using a market
price per share of $1.00, risk-free interest rate of 3.32% and a 100% volatility
index. Consequently, the Company recorded a discount of $64,857 on the notes,
based on the relative fair value of the warrants, which is being amortized over
the term of these notes. These notes also contain a conversion feature in which
the holder may convert their respective principal and accrued interest into
shares of the Company’s common stock at $1.00 per share. During the fiscal
quarter ended September 30, 2008; $90,000 of principal from the notes were
converted into 90,000 shares of common stock and accrued interest of $770 was
converted into 770 shares of common stock.


F-15




In the
fourth quarter of 2008, the company raised $450,000 in a private offering from
accredited investors. The securities sold by the Company consisted of its 12%
secured convertible promissory notes and warrants to purchase 450,000 shares of
the Company’s common stock , at an exercise price ranging between $0.70 and
$1.00.  The warrants were valued using the Black–Scholes method. This
resulted in a total value of $203,966 assuming a fair value per share of $1.00,
risk-free interest rates ranging from 2.06% to 2.75% based on the note issuance
and 100% volatility index.  Under  FASB accounting guidance, we
allocated the proceeds from issuance of these notes and warrants based on the
proportional fair value for each item.  Consequently, we recorded a
discount of $209,966 which is being amortized over the term of these notes using
the effective interest rate ranging from 3.815% to 5.329%.  A beneficial
conversion discount was also recorded on these convertible notes since these
notes were convertible into shares of common stock at an effective conversion
price lower than the fair value of the common stock.  The beneficial
conversion amount was limited to the portion of the cash proceeds allocated to
those convertible notes.





On
October 22, 2008 the company received $25,000 from an accredited investor as a
90 day zero coupon note in which $30,000 was due in January 2009. Payments
on the $30,000 note through March 31, 2009 were $16,500 and the balance was
paid  in full during April 2009.





In
January and February 2009 the Company raised $160,000 in a private offering
from accredited investors. The securities sold by the Company consisted of its
12% secured convertible promissory notes and warrants to purchase 160,000 shares
of the Company’s common stock, respectively at an exercise price of $1.00. The
warrants were valued using the Black–Scholes method. This resulted in a total
value of $117,885 assuming a fair value per share of $1.00, risk-free interest
rates ranging of 1.50% to 1.74% respectively, based on the note issuance and
100% volatility index.  Under FASB guidance, we allocated the proceeds from
issuance of these notes and warrants based on the proportional fair value for
each item.  Consequently, we recorded a discount of $131,894 which is being
amortized over the term of these notes using an effective periodic interest rate
of between 46 and 63,146%. A beneficial conversion discount was recorded on
these convertible notes since these notes were convertible into shares of common
stock at an effective conversion price lower than the fair value of the common
stock.  The beneficial conversion amount was limited to the portion of the
cash proceeds allocated to those convertible notes.





In the
first quarter of 2009, three of our 12% convertible note holders converted their
notes of $205,000, into shares of common stock at a conversion rate of
$0.70.  This resulted in an issuance of 292,858 shares of common
stock.  In addition the three note holders also converted their accumulated
interest on their respective notes into shares of the Company’s common stock at
a conversion rate of $0.70.  The total interest converted was $23,627 and
converted into 33,752 of the Company’s common shares.





During
March 2009, the holders of $2,025,000 of our secured convertible promissory
notes that were scheduled to mature on March 31, 2009 agreed to extend the
maturity date to July 31, 2009.  As consideration for their agreement to
extend the maturity date, we issued three-year warrants to the note holders
granting them the right to purchase an aggregate of 600,000 shares of our common
stock, at an exercise price of $1.00 per share. The Company recorded these
warrants at a value of $149,675 which is being amortized over the term of the
loan extensions.  During July 2009, the note holders, who had not yet
converted their notes into common shares, along with our July and August
noteholders having this same July 31st
maturity date agreed to extend the maturity date to January 31, 2010. These
holders have an aggregate of $2,380,000 of our secured convertible
promissory notes. We issued three-year warrants to the note holders granting
them the right to purchase an aggregate of 680,000 shares of our common stock,
at an exercise price of $1.00 per share. The Company recorded these warrants at
a value of $115,600 which is being amortized over the term of the loan
extensions.





On April
9, 2009,  the Company entered into a financing transaction with
OmniReliant Holdings, Inc. (“Omni”) pursuant to a purchase agreement whereby it
sold to Omni a convertible original issue discount promissory note in the
principal amount of $550,000 (the “First Note”), with the Company receiving
proceeds of $500,000.  The First Note is convertible at any time at the
option of Omni at a conversion price of $1.00 and is due on May 9, 2009. 
Omni also received warrants to purchase up to 500,000 shares of the Company’s
Common Stock with an exercise price of $1.00. There was a reset provision
associated with the note in regards to subsequent equity sales affecting the
note and warrants.  Based on subsequent financing transactions in,
October  2009 the exercise price of the warrants and the conversion
price of the debt was reset to $0.10.  In accordance with FASB accounting
guidance related to the valuation of convertible notes and warrants with
conversion features and/or exercise features that can reset the conversion
and/or exercise price based on future equity transactions, the Company valued
the warrants and conversion feature of this note and bifurcated them from the
host contract as a derivative by recognizing an additional liability for the
fair value assigned to those derivative features of
approximately $92,000.  The value of this derivative at December 31,
2009 was approximately $21,000. The change in the derivative was reported in the
statement of operations for the year ended December 31, 2009.  The company
also recorded a discount on this note of approximately $216,000 related to the
value of the note conversion feature to be amortized over the term of the
note.  Since this note was paid off on May 7, 2009, the discount related to
the conversion feature was expensed and the derivative related to the
note was removed during the quarter ended June 30, 2009.


F-16




During
April 2009, eight of our note holders converted the principal and interest of
their convertible promissory notes into shares of the Company common stock at a
conversion rate of $0.70 per share.  Total principal converted was
$665,000, which was converted into 950,000 of the Company common shares. 
Total accrued interest of $77,405 was converted into 110,590 of the Company
common shares.





On May 1,
2009, the Company issued a 120 day promissory note at 12% interest to an
accredited investor for $800,000.  As a condition of the note, the company
issued the lender 400,000 warrants to purchase the Company's common shares at a
price of $1.00 per share. The warrants were valued using the Black–Scholes
method. This resulted in a total value of $363,965, assuming a fair value per
share of $1.00, risk-free interest rate of 1.98% and, based on the note issuance
and 100% volatility index.  Under FASB accounting guidance, we allocated
the proceeds from issuance of this note and warrants based on the proportional
fair value for each item.  The relative fair value of the warrant was
$250,160.  A beneficial conversion discount was recorded on the convertible
note since the note is convertible into shares of common stock at an effective
conversion price lower than the fair value of the common stock. Consequently, we
recorded a total discount of $772,160 which is being amortized over the term of
these notes using an effective periodic interest rate of 436%.  The note
was extended on July 15, 2009 in return for monthly cash interest payments with
the maturity date being moved to January 28, 2010. The broker received a cash
fee of $80,000





On May 7,
2009 one of our note holders converted the principal and interest of their
convertible promissory note into shares of the Company common stock at a
conversion rate of $1.00 per share. Total principal converted was $100,000,
which was converted into 100,000 shares of the Company common stock.  Total
accrued interest converted was $4,000 into 4,000 of the Company common
shares.





On May
20, 2009, the Company executed a convertible promissory note (the “Note”) in the
principal amount of $1,600,000 payable to Linlithgow Holdings, LLC
(“Linlithgow”).  Pursuant to the Note, the Company promises to pay to
Linlithgow $1,600,000 in cash on November 20, 2009. The Note is convertible at
any time at a conversion price of $1.00 per share which was reset to $0.70 due
to a subsequent offering.  The Note bears an initial interest rate of 1.5%
for the first month and increases by 1.5% per month until maturity. After the
maturity date, the default rate of interest becomes 18% per month or the highest
rate allowed by law, whichever is lower, until the date the Note amount is
actually paid. Further, as part of the consideration provided to the Holder
for the Note, the Holder also received a warrant for the purchase of up to
1,782,000 shares of the Company’s common stock at an exercise price of $0.90 per
share. Due to subsequent issuances of stock at amounts less than $0.70 per
share in October 2009,  the exercise price of these warrants has been
adjusted to $0.10. In accordance with FASB guidance, related to the valuation of
convertible notes and warrants with conversion features and/or exercise features
that can reset the conversion and/or exercise price based on future equity
transactions, the Company valued the warrants and conversion feature of this
note and bifurcated them from the host contract as a derivative by recognizing
an additional liability for the fair value assigned to those derivative features
of  approximately $618,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately
$1,167,000.  The change in the derivative was reported in the statement of
operations for the year ended December 31, 2009.  The company recorded the
discount on this note of approximately $465,000 related to the value of the
warrants and derivative liability to be amortized over the term of the note at
an effective rate of approximately 50%.  Additionally, the warrants issued
as costs of this financing were valued at approximately $1,125,000 and are being
amortized over the term of the note.  The broker also received a cash
fee of $120,000 from the proceeds of this note.  In October 2009, the
maturity date of this note was extended to May 16, 2010 in exchange for the
Company issuing 6,400,000 warrants with an exercise price of $0.10.  The
company valued these warrants using the Black-Scholes method at approximately
$509,000 and is amortizing them over the extended term of the note using the
effective interest method.





During
May 2009, seven of our note holders converted the principal and interest of
their convertible promissory notes into shares of the Company common stock at a
conversion rate of $.70 per share. Total
principal converted was $820,000, which was converted into 1,171,430 of the
Company common shares.  Total accrued interest of $95,773 was converted
into 136,830 of the Company common shares.


F-17





On June
4, 2009 the Company sold a Convertible Original Issue Discounted (OID)
promissory note for $526,316 to an accredited investor which is due
1/15/2010.  The Company paid the broker a cash fee of $50,000. 
However, on June 19, 2009, the average trading volume of the common stock of the
Company was under $80,000 for the ten prior consecutive trading days, which
constituted a technical “Event of Default” under the Company’s Series 2009
Secured Convertible Original Issue Discount Note Due January 15, 2010, dated
June 4, 2009 (the “Note”), made by the Company, in favor of St. George
Investments, LLC (St. George). As a result of the Event of Default, the
principal amount of the Note, equal to $714,286, plus a penalty of $71,428.60
(equal to 10% of the principal amount), became immediately due and payable. At
any time following either the Maturity Date or occurrence of an Event of
Default, the note may be convertible into shares of the Common Stock of the
Company valued at the Market Price which is hundred percent (100%) of the lower
of (a) the closing bid price on the trading day on which the Share Conversion
Request is made or (b) the average of the volume weighted average prices as
reported by Bloomberg, L.P. during the ten (10) trading days in the primary
trading market for Common Shares prior to and including the trading day on which
the Share Conversion Request is made.





The St.
George Note was secured by an aggregate of 4,020,000 shares of the Company’s
common stock pledged by affiliates of the Company, pursuant to stock pledge
agreements entered into by the affiliates in favor of St. George, including
2,020,000 shares pledged by Mark Noffke, the Company’s chief financial officer.
Pursuant to the pledge agreement entered into by Mr. Noffke, shares pledged by
Mr. Noffke could be transferred to St. George and sold in full satisfaction of
the Company’s obligations under the Note.





Subsequently,
the Company and St. George Investments, LLC, entered into an agreement dated
July 30, 2009 (the “Agreement”) pursuant to which the Company would satisfy the
remaining outstanding balance of $420,593.40 on its Series 2009 Secured
Convertible Original Issue Discount Note, due June 15, 2010, issued to St.
George (the “Note”).  Pursuant to the Agreement, the Company was to make
the following payments (the “Scheduled Payments”) on the Note:  (i)
$100,000 paid on July 30, 2009, (ii) $50,000 was to be paid by August 6, 2009,
(iii) 50,000 was to be paid by August 13, 2009, (iv) $50,000 was to be paid by
August 20, 2009, (v) $50,000 shall be paid by August 27, 2009, (vi) $50,000 was
to be paid on or before September  3, 2009, (vii) $50,000 was to be
paid on or before September 10, 2009 and (viii) $20,995.40 was to be paid on or
before September 17, 2009.  The Company settled the first two payments of
the Agreement.  In addition, when the note was deemed in default, St.
George took collateral and monetized it towards payment of the note. 
Provided the Scheduled Payments continued to be made in accordance with the
Agreement, the Note would be deemed paid in full and St. George would return the
remaining 3,015,424 shares of the Company’s common stock not previously
monetized which had been pledged as security for repayment of the Note, and
would not hold any other shares pledged in connection with the Note.  The
August payments were not made and St. George monetized 1,988,592 of the
2,020,000 shares pledged by Mark Noffke for full payment of the note. The
average sale price of these shares range from $0.70 to $0.16 over a three month
period ending September 9, 2009 when the Company paid St. George $95,000 to pay
off the balance of the note.





On June
16, 2009, the Company entered into another financing with Omni pursuant to a
second purchase agreement whereby it sold Omni a convertible original issue
discount promissory note (the “Second Note”) in the principal amount of
$575,000, with the Company receiving proceeds of $500,000.  Pursuant to the
terms of the Second Note, the Company must pay to the Holder $575,000 in cash on
August 1, 2009.





This Note
is convertible at any time at a conversion price of $0.70 per share. In
addition, the Company gave the lender 700,000 and the broker 121,714 warrants to
purchase the Company stock, respectively, both with an exercise price of $0.70.
In accordance with FASB guidance, related to the valuation of convertible notes
and warrants with conversion features and/or exercise features that can reset
the conversion and/or exercise price based on future equity transactions, the
Company valued the warrants and conversion feature of this note and bifurcated
them from the host contract as a derivative by recognizing an additional
liability for the fair value assigned to those derivative features
of  approximately $24,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately $29,000. 
The change in the derivative was reported in the statement of operations for the
year ended December 31, 2009.  The company recorded a discount on this note
of approximately $175,000 related to the value of the warrants and derivative
liabilities to be amortized over the term of the note at an effective rate of
approximately 72%.  Additionally, the warrants and related derivative
liability issued as costs of this financing were valued at approximately $25,000
and are being amortized over the term of the note. The Broker received a cash
payment of $40,000 from the proceeds of the note. The note was paid in full on
July 20, 2009.  The exercise price of the warrants was reduced to $0.10 as
a result of subsequent stock issuances in October 2009.


F-18





On June
29, 2009, the Company entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”) with Omni. Additionally, on July 2, 2009, the
Company and Omni entered into an amended and restated Securities Purchase
Agreement (the Purchase Agreement as amended and restated is referred to herein
as the “Securities Purchase Agreement”).  Pursuant to the Securities
Purchase Agreement, Omni agreed to purchase up to $3,500,000 in principal amount
of the Company’s Original Issue Discount Secured Convertible Debentures (the
“Debentures”) for a purchase price of up to $3,000,000.  As part of this
Agreement 5,000,000 shares of the Company’s Common Stock held by Linlithgow
Holdings, LLC was pledged as collateral. .  Under the terms of the
Securities Purchase Agreement, Omni agreed to not engage in any short sales of
the Company’s common stock, as defined in Rule 200 of Regulation SHO under the
Exchange Act, except to facilitate the transactions contemplated within the
Securities Purchase Agreement, until such time as the transaction was
consummated and disclosed to the public.  After such time, the Securities
Purchase Agreement specifically states that Omni would make no such warranty or
covenant that it would not engage in short sales.





Pursuant
to the Securities Purchase Agreement, the Company sold Omni an aggregate of
$1,166,660 of Debentures and received gross proceeds of $1,000,000 and Omni
agreed to purchase an additional Debenture with a face value of up to $2,333,340
on or before July 30, 2009.  Omni was also issued warrants to purchase
4,999,972 shares of the Company’s Common Stock with an exercise price of $0.70
per share subject to a reset provision. The warrants are exercisable, for five
years from the date of issuance.  The Debentures are convertible into
shares of the Company’s Common Stock at any time at the option of the Holder at
a conversion price of $0.70 per share, subject to adjustment (the “Conversion
Price”).  Interest on the Debenture is 10% per annum.  The first
Debenture was issued on June 29, 2009 and the second Debenture to be issued on
July 2, 2009.  The principal amount of each of the Debentures is $583,350
and each has a maturity date of twelve months from the date of issuance. 
The Debentures cannot be converted to common stock to the extent such conversion
would cause the holder of the Debenture, together with such holder’s affiliates,
to beneficially own in excess of 4.99% (or a maximum 9.99% in certain cases) of
the Company’s outstanding common stock immediately following such
conversion.





Beginning
six months from the original issue date of the  Debentures, on the 1st of
each month (the “Monthly Redemption Date”) the Company was required to redeem
the Monthly Redemption Amount ($97,221.66 for each $583,330 Debenture, plus
accrued but unpaid interest, liquidated damages and any other amounts then owing
to the Holder under the Debenture). The Monthly Redemption Amount payable on
each Monthly Redemption Date was to be paid in cash at a rate of 110% of the
Monthly Redemption Amount or upon 30 trading days’ notice the Company may in
lieu of cash pay all or part of the Monthly Redemption Amount in conversion
shares.





Payment
of the Debentures issued to Omni is secured pursuant to a security interest and
pledge agreement (the “Security Interest and Pledge Agreement”) whereby, on June
29, 2009, Linlithgow Holdings LLC pledged 2,500,000 shares of BYOC common
stock.  On July 2, 2009, the Company and Omni amended the Security Interest
and Pledge Agreement so that additional pledgors could pledge their respective
unpledged shares of BYOC Common Stock (the Security Interest and Pledge
Agreement, as amended and restated, is referred to herein as the “Security
Interest and Pledge Agreement”).  Pursuant to the terms of the Security
Interest and Pledge Agreement, Linlithgow Holdings, LLC pledged an additional
3,982,000 shares of BYOC Common Stock, Wendy Borow-Johnson, the President of
Brand Management pledged 480,000 shares BYOC Common Stock, and Robert McNulty,
the Chief Executive Officer of the Company, pledged 505,000 shares of BYOC
Common Stock. .  The Debenture was extinguished as part of the proceeds
from the sale of LocalAdLink assets to Omni in October 2009 (see Note
16).





On June
29, 2009, the Company issued Omni the first Debenture in the amount of $583,330
and received gross proceeds of $500,000. There is a reset provision associated
with the note in regards to the payment date.  Additionally, there is a
provision in the agreement, whereby, if there is a change in control of the
Company, the holder has the right to accelerate payment which is based off a
formula which could result in a payment greater than the principal and interest
amount owing before the change of control.  In addition for the receipt of
funds, the company issued the lender 2,499,986 and the broker 266,669 warrants
to purchase the Company’s common stock at a price of $0.70, respectively. In
accordance with FASB guidance, related to the valuation of convertible notes and
warrants with conversion features and/or exercise features that can reset the
conversion and/or exercise price based on future equity transactions, the
Company valued the warrants and conversion feature of this note and bifurcated
them from the host contract as a derivative  by recognizing an
additional liability for the fair value assigned to those derivative features
of  approximately $74,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately $7,700. 
The change in the fair value of the derivative was reported in the statement of
operations for the year ended December 31, 2009.  The company recorded a
discount on this note of approximately $298,000 related to the value of the
warrants and derivative liability to be amortized over the term of the note at
an effective rate of approximately 96%.  Additionally, the warrants issued
and related derivative liability as costs of this financing were valued at
approximately $65,000 and are being amortized over the term of the note. 
The Company also paid the broker a $40,000 cash fee.  The
Debenture and warrants were extinguished as part of the proceeds from
the sale of LocalAdLink assets to Omni in October 2009 (see Note
16).





Also,
during June 2009, three of our note holders converted the principal and interest
of their convertible promissory notes into shares of the Company common stock at
a conversion rate of $.70 per share.  Total principal converted was
$210,000, which was converted into 300,010 of the Company common shares. 
Total accrued interest of $22,507 was converted into 32,160 of the Company
common shares.


F-19





On July
2, 2009, the Company issued Omni the second Debenture in the amount of $583,350
and received gross proceeds of $500,000. There is reset provision associated
with the note in regards to the payment date.  Additionally, there is a
provision in the agreement, whereby, if there is a change in control of the
Company, the holder has the right to accelerate payment which is based off a
formula which could result in a payment greater than the principal and interest
amount owing before the change of control.  In addition for the receipt of
funds, the company issued the lender 2,499,986 and the broker 266,669 warrants
to purchase the Company’s common stock at a price of $0.70, respectively. In
accordance with FASB guidance, related to the valuation of convertible notes and
warrants with conversion features and/or exercise features that can reset the
conversion and/or exercise price based on future equity transactions, the
Company valued the warrants and conversion feature of this note and bifurcated
them from the host contract as a derivative by recognizing an additional
liability for the fair value assigned to those derivative features
of approximately $46,000 at inception of the agreement.  At December
31, 2009 the value of the derivative was approximately $7,700.  The change
in the derivative was reported in the statement of operations for the year ended
December 31, 2009.  The company recorded a discount on this note of
approximately $325,000 related to the value of the warrants, derivative
liability and OID to be amortized over the term of the note at an effective rate
of 92%.  Additionally, the warrants issued and related derivative liability
as costs of this financing were valued at approximately $51,000 and are being
amortized over the term of the note.  The Company also paid the broker a
$40,000 cash fee.  The Debenture and warrants were extinguished
as part of the proceeds from the sale of LocalAdLink assets to Omni in October
2009 (see Note 16)





On July
10, 2009, the Company issued Omni the third Debenture in the amount of $583,330
and received gross proceeds of $500,000. These notes begin to mature six months
from the issuance date at one sixth the face value of the note being paid over
the next six month period.There is reset provision associated with the note in
regards to the payment date.  Additionally, there is a provision in the
agreement, whereby, if there is a change in control of the Company, the holder
has the right to accelerate payment which is based off a formula which could
result in a payment greater than the principal and interest amount owing before
the change of control.  In addition for the receipt of funds, the company
issued the lender 2,499,986 and the broker 266,669 warrants to purchase the
Company’s common stock at a price of $0.70. In accordance with FASB guidance,
related to the valuation of convertible notes and warrants with conversion
features and/or exercise features that can reset the conversion and/or exercise
price based on future equity transactions, the Company valued the warrants and
conversion feature of this note and bifurcated them from the host contract as a
derivative by recognizing an additional liability for the fair value assigned to
those derivative features of  approximately $46,000 at inception of
the agreement.  At December 31, 2009 the value of the derivative was
approximately $7,700.  The change in the derivative was reported in the
statement of operations for the year ended December 31, 2009.  The company
recorded a discount on this note of approximately $319,000 related to the value
of the warrants, derivative liability and OID to be amortized over the term of
the note at an effective rate of 88%.  Additionally, the warrants issued
and related derivative liability as costs of this financing were valued at
approximately $49,000 and are being amortized over the term of the note. 
The Company also paid the broker a $40,000 cash fee.  The Debenture and
warrants were extinguished as part of the proceeds from the sale of LocalAdLink
assets to Omni in October 2009 (see Note 16).





On July
21, 2009, the Company issued Omni the fourth Debenture in the amount of
$1,750,010 and received gross proceeds of $1,500,000. These notes begin to
mature six months from the issuance date at one sixth the face value of the note
being paid over the next six month period.  There is reset provision
associated with the note in regards to the payment date.  Additionally,
there is a provision in the agreement, whereby, if there is a change in control
of the Company, the holder has the right to accelerate payment which is based
off a formula which could result in a payment greater than the principal and
interest amount owing before the change of control.  In addition for the
receipt of funds, the company issued the lender 7,500,042 and the broker 800,001
warrants to purchase the company common stock at a price of $0.70. In accordance
with FASB guidance related to the valuation of convertible notes and warrants
with conversion features and/or exercise features that can reset the conversion
and/or exercise price based on future equity transactions, the Company valued
the warrants and conversion feature of this note and bifurcated them from the
host contract as a derivative - by recognizing an additional liability for the
fair value assigned to those derivative features of  approximately
$112,000 at inception of the agreement.  At December 31, 2009 the value of
the derivative was approximately $23,100.  The change in the derivative was
reported in the statement of operations for the year ended December 31,
2009.  The company recorded a discount on this note of approximately
$853,000 related to the value of the warrants, derivative liability and OID to
be amortized over the term of the note at an effective rate of 72%. 
Additionally, the warrants issued and related derivative liability
as  costs of this financing were valued at approximately $112,000 and
are being amortized over the term of the note.  The Company also paid the
broker a $120,000 cash fee.  The Debenture and warrants were extinguished
as part of the proceeds from the sale of LocalAdLink assets to Omni in October
2009 (see Note 16).





On July
21, 2009, the Company paid Omni  in full an OID promissory note dated
June16, 2009 in the amount of $575,000. Also on this date, the Company paid on
behalf of Linlithgow Holdings, Inc, a payment due Debt Opportunity Fund which
resulted in a reduction in the amount due Linlithgow under the May 20, 2009
Convertible Promissory Note in the amount of $266,667 on a promissory note dated
5/20/09.


F-20


On July
29, 2009, the Company issued Omni the fifth Debenture in the amount of $641,663
and received gross proceeds of $550,000. These notes begin to mature six months
from the issuance date at one sixth the face value of the note being paid over
the next six month period.  There is reset provision associated with the
note in regards to the payment date.  Additionally, there is a provision in
the agreement, whereby, if there is a change in control of the Company, the
holder has the right to accelerate payment which is based off a formula which
could result in a payment greater than the principal and interest amount owing
before the change of control.  In addition for the receipt of funds, the
company issued the lender 2,777,764 and the broker 293,333 warrants to purchase
the Company’s common stock at a price of $0.70, respectively. In accordance with
FASB guidance related to the valuation of convertible notes and warrants with
conversion features and/or exercise features that can reset the conversion
and/or exercise price based on future equity transactions, the Company valued
the warrants and conversion feature of this note and bifurcated them from the
host contract as a - by recognizing an additional liability for the fair value
assigned to those derivative features of  approximately $43,000 at
inception of the agreement.  At December 31, 2009 the value of the
derivative was approximately $319,000.  The change in the derivative was
reported in the statement of operations for the period ended December 31,
2009.  The company recorded a discount on this note of approximately
$324,000 related to the value of the warrants, derivative liability and OID to
be amortized over the term of the note at an effective rate of 76%. 
Additionally, the warrants issued and related derivative liability as costs of
this financing were valued at approximately $44,000 and are being amortized over
the term of the note.  The Company also paid the broker a $44,000 cash fee.
The Debenture was partially surrendered in the amount of $500,000 and
warrants for 571,037 shares of our common stock were also surrendered as part of
the proceeds from the sale of LocalAdLink, and the remainder was modified
by Omni in October 2009 (see Note 16). The exercise price of the warrants and
conversion price of the convertible notes, for the portion that remained
outstanding after the LocalAdLink transaction, was reduced to $0.10 as a result
of subsequent stock issuances in October 2009.





On August
4, 2009, one of our 12% convertible note holders converted their note of
$100,000 into shares of common stock at a conversion rate of $0.35. This
resulted in an issuance of 285,710 shares of common stock.  In addition the
note holder also converted their accumulated interest on their note into shares
of the Company’s common stock at a conversion rate of $0.35.  The total
interest converted was $18,567 and converted into 53,050 of the Company’s common
shares.





On August
11, 2009 the Company issued Omni the sixth Debenture in the amount of $291,665
and received gross proceeds of $250,000. These notes begin to mature six months
from the issuance date at one sixth the face value of the note being paid over
the next six month period.  There is reset provision associated with the
note in regards to the payment date.  Additionally, there is a provision in
the agreement, whereby, if there is a change in control of the Company, the
holder has the right to accelerate payment which is based off a formula which
could result in a payment greater than the principal and interest amount owing
before the change of control. In addition for the receipt of funds, the company
issued the lender 1,250,000 and the broker 133,333 warrants to purchase the
Company’s common stock at a price of $0.70, respectively. In accordance with
FASB guidance, related to the valuation of convertible notes and warrants with
conversion features and/or exercise features that can reset the conversion
and/or exercise price based on future equity transactions, the Company valued
the warrants and conversion feature of this note and bifurcated them from the
host contract as a derivative by recognizing an additional liability for the
fair value assigned to those derivative features of  approximately
$19,000 at inception of the agreement.  At December 31, 2009 the value of
the derivative was approximately $3,850.  The change in the derivative was
reported in the statement of operations for the year ended December
312009.  The company recorded a discount on this note of approximately
$142,000 related to the value of the warrants, derivative liability and OID to
be amortized over the term of the note at an effective rate of 56%. 
Additionally, the warrants issued and related derivative liability as costs of
this financing were valued at approximately $19,000 and are being amortized over
the term of the note.  The Company also paid the broker a $20,000 cash
fee.  In connection with the sale of the assets of Local Ad Link, this
Debenture was modified, see Note 16. The conversion price of the convertible
note and the exercise price of the warrants was reduced to $0.10 as a result of
subsequent stock issuances in October 2009.





On August
20, 2009, the Company issued Omni the seventh Debenture in the amount of
$116,666 and received gross proceeds of $100,000. These notes begin to mature
six months from the issuance date at one sixth the face value of the note being
paid over the next six month period.  There is reset provision associated
with the note in regards to the payment date.  Additionally, there is a
provision in the agreement, whereby, if there is a change in control of the
Company, the holder has the right to accelerate payment which is based off a
formula which could result in a payment greater than the principal and interest
amount owing before the change of control.  In addition for the receipt of
funds, the company issued the lender 500,000and the broker 53,333 warrants to
purchase the Company’s common stock at a price of $0.70,
respectively.





In
accordance with FASB guidance, related to the valuation of convertible notes and
warrants with conversion features and/or exercise features that can reset the
conversion and/or exercise price based on future equity transactions, the
Company valued the warrants and conversion feature of this note and bifurcated
them from the host contract as a derivative by recognizing an additional
liability for the fair value assigned to those derivative features
of  approximately $3,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately $21,000. 
The change in the derivative was reported in the statement of operations for the
year ended December 31, 2009.  The company recorded a discount on this note
of approximately $43,000 related to the value of the warrants, derivative
liability and OID to be amortized over the term of the note at an effective rate
of 40%.  Additionally, the warrants issued and related derivative liability
as costs of this financing were valued at approximately $5,000 and are being
amortized over the term of the note.  In connection with the sale of the
assets of Local Ad Link, this Debenture was modified, and the conversion price
of the debenture and exercise price of the warrants was reduced to $0.10 per
share see Note 16.


F-21





On August
27, 2009 the Company issued Omni the eighth Debenture in the amount of $373,332
and received gross proceeds of $320,000. There is reset provision associated
with the note in regards to the payment date.  Additionally, there is a
provision in the agreement, whereby, if there is a change in control of the
Company, the holder has the right to accelerate payment which is based off a
formula which could result in a payment greater than the principal and interest
amount owing before the change of control.  In addition for the receipt of
funds, the company issued the lender 1,600,000 and the broker 170,667 warrants
to purchase the Company’s common stock at a price of $0.70,
respectively.





In
accordance with FASB guidance, related to the valuation of convertible notes and
warrants with conversion features and/or exercise features that can reset the
conversion and/or exercise price based on future equity transactions, the
Company valued the warrants and conversion feature of this note and bifurcated
them from the host contract as a derivative by recognizing an additional
liability for the fair value assigned to those derivative features
of  approximately $10,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately$66,500. 
The change in the derivative was reported in the statement of operations for the
year ended December31, 2009.  The company recorded a discount on this note
of approximately $138,000 related to the value of the warrants, derivative
liability and OID to be amortized over the term of the note at an effective rate
of 40%.  Additionally, the warrants issued and related derivative liability
as costs of this financing were valued at approximately $13,000 and are being
amortized over the term of the note.  In connection with the sale of the
assets of Local Ad Link, this Debenture was modified, and the
conversion price of the debenture and exercise price of the warrants was reduced
to $0.10 per sharesee Note 16.





On
September 3, 2009 the Company issued Omni the ninth Debenture in the amount of
$699,996 and received gross proceeds of $600,000. There is reset provision
associated with the note in regards to the payment date.  Additionally,
there is a provision in the agreement, whereby, if there is a change in control
of the Company, the holder has the right to accelerate payment which is based
off a formula which could result in a payment greater than the principal and
interest amount owing before the change of control.  In addition for the
receipt of funds, the company issued the lender 3,000,000 and the broker 266,669
warrants to purchase the Company’s common stock at a price of $0.70,
respectively. In accordance with FASB guidance, related to the valuation of
convertible notes and warrants with conversion features and/or exercise features
that can reset the conversion and/or exercise price based on future equity
transactions, the Company valued the warrants and conversion feature of this
note and bifurcated them from the host contract as a derivative by recognizing
an additional liability for the fair value assigned to those derivative features
of  approximately $22,000 at inception of the agreement.  At
December 31, 2009 the value of the derivative was approximately $125,000. 
The change in the derivative was reported in the statement of operations for the
year ended December 31, 2009.  The company recorded a discount on this note
of approximately $275,000 related to the value of the warrants, derivative
liability and OID to be amortized over the term of the note at an effective rate
of 40%.  Additionally, the warrants issued and related derivative liability
as costs of this financing were valued at approximately $23,000 and are being
amortized over the term of the note.  The Company also paid the broker a
$40,000 cash fee. In
accordance with the sale of the assets of Local Ad Link, this Debenture was
modified, and the
conversion price of the debenture and exercise price of the warrants was reduced
to $0.10 per sharesee Note 16.





The
Company recorded and $1,042,241 and $637,854 as interest expense on the above
notes for the twelve month period ended December 31, 2009 and 2008,
respectively. Also, included in interest expense is the amortization of
$8,136,833 and $2,446,939 of loan origination fees and discounts associated with
these notes for the year ended 2009 and 2008 respectively.




In the
third and forth quarter of 2009, we offered to holders of our then outstanding
convertible notes originally issued in 2007 and 2008, reductions in their
conversion prices to induce conversion of their notes.  The
inducements ranged from reductions of the conversion price of the notes to
between $0.35 to $0.10.  Note holders with principal amount of
$400,000 of convertible notes and accrued interest of approximately $34,000
accepted the inducement and surrendered their notes and received 3,491,127
shares of our common stock.  The Company recorded additional expense
for the extra shares issued as a result of the inducement in the amount of
$221,037.




NOTE
8  COMMON STOCK,
WARRANTS AND PAID IN CAPITAL




Common
Stock




As of
December 31, 2009 our authorized capital stock consisted of 200,000,000 shares
of common stock, par value $.001 per share. As of December 31, 2009, there were
58,793,311 issued and outstanding shares of common stock. The Company issued
17,857,168 shares of common stock during the twelve month period ended December
31, 2009.





Holders
of common stock are entitled to one vote per share on all matters submitted to a
vote of the stockholders, including the election of directors. Except as
otherwise required by law, the holders of our common stock possess all voting
power. Generally, all matters to be voted on by stockholders must be approved by
a majority (or, in the case of election of directors, by a plurality) of the
votes entitled to be cast by all shares of our common stock that are present in
person or represented by proxy.  A vote by the holders of a majority of our
outstanding shares is required to effectuate certain fundamental corporate
changes such as liquidation, merger or an amendment to our Articles of
Incorporation. Our Articles of Incorporation do not provide for cumulative
voting in the election of directors.


F-22





Holders
of our common stock have no pre-emptive rights, no conversion rights and there
are no redemption provisions applicable to our common stock.





On
January 18, 2008, the promissory note with Centurion Credit Resources, LLC was
modified to extend the term for an additional ninety (90) days. As a condition
precedent to modification, the Company paid Centurion Credit Resources (a) an
origination fee of $20,000, and (b) 300,000 shares of the Company’s common
stock. These shares were valued at $0.30 per share for a total of $90,000.
$22,500 of this cost was amortized during the three month period ended March 31,
2008 as debt financing fees. On April 18, 2008 the Company entered into a Second
Modification Agreement with Centurion Credit Resources, LLC on its $500,000
note. As a condition precedent to modification, the Company paid to Centurion
Credit Resources’ (a) an origination fee in the amount of $25,000, and (b)
100,000 additional shares of the Company’s common stock valued at
$30,000.




On
January 19, 2008, the Company issued a four-year warrant to purchase up to
12,500 shares of common stock at an exercise price of $0.70 per share to an
accredited investor for services rendered in connection with obtaining short
term financing for the Company.  The warrants were valued using the
Black–Scholes method at $0.001 per share. This resulted in a total value of $10
assuming a risk-free interest rate range of 4.00%, and 16% volatility
index.





On
January 25 and February 1, 2008, the Company issued an aggregate of 105,000
shares of the Company’s common stock to three entities for services rendered to
the Company. These shares were valued by the Company at $0.30 per share for a
total of $31,500. The total amount was amortized during 2008 as debt financing
fees.





On
February 7, 2008, the Company issued a warrant to a media entity for services
rendered to the Company. Included in this transaction were the issuances of
20,000 warrants exercisable at $0.93 per share, expiring in 2011. The warrants
were valued using the Black–Scholes method at $0.092 per share. This resulted in
a total value of $1,843 assuming a risk-free interest rate of 3.50% and 73%
volatility index. This amount was expensed in selling, administrative, and
general expense during the three month period ended March 31, 2008





On
February 13, 2008, the Company issued 350,000 shares of the Company’s common
stock to three entities for services rendered in connection with the private
placement offering of the Convertible 12% Secured Promissory Notes described
above for February 7, 2008. These shares were valued by the Company at $0.30 per
share for a total of $105,000.




On
February 20, 2008, Carole Harder, an accredited investor, acquired 71,429 shares
of the Company’s common stock at $0.70 per share for $50,000 in cash. Also,
included in this transaction was the issuance of a warrant to purchase 71,429
shares of our common stock at an exercise price of $0.93 per share expiring in
2011.





On
February 28, 2008, the Company issued 40,000 shares of its common stock upon the
exercise of warrants to purchase the Company’s stock at $0.01 per share by two
entities.





On March
12, 2008, an accredited investor acquired 40,000 shares of the Company’s common
stock at $0.70 per share or $28,000 in cash. Also, included in this transaction
was the issuance of a warrant to purchase 40,000 shares of our common stock at
an exercise price of $0.93 per share expiring in 2013.




In May
2008, the Company entered into an agreement with Wealth Wise LLC to provide
investor relation and other services to the Company on a month-to-month basis.
As compensation for these services, we agreed to pay Wealth Wise
LLC $25,000 in cash and 25,000 shares of our common stock each month. In
2008 we issued a total of 100,000 shares of our stock under this agreement and
recorded expense in the amount of $303,730.




On
May 29, 2008 one of the January 2008 note holders converted an amount of $26,027
being principal and interest of their note into 37,182 shares of the Company’s
common stock.





During
2008 the Company issued 535,715 shares of the Company’s common stock, to one of
its service providers of technical and administrative assistance for the
Company’s e-commerce platform, in settlement of a liability incurred during
2008.  The Company agreed - to settle the liability at $.70 per
share.  However, in accordance with generally accepted accounting
principles, since the trading price of the common stock on the date of
settlement was $3.21 per share, the Company recorded an additional expense of
$268,929 in 2008.





During 2008
the Company issued 425,376 shares of its common stock for $428,635 to foreign
investors.


F-23





During
2008, one of our placement agents and three of our investors exercised their
warrants utilizing a cashless option in their agreement, converting 744,027
warrants into 574,326 shares of the Company’s common stock at an exercise price
of $0.93.





On August 22, 2008 the
Company issued 224,646 shares of the Company’s common stock to another one of
our placement agents as part of their commission in connection with the
convertible note private placement.   In accordance with an agreement
with the placement agent, the number of shares was determined by converting the
cost of services to common stock at $.70 per share.  However, at the time
of settlement, in accordance with generally accepted accounting principles, the
Company used the trading price of the stock, which ranged between $2.24 and
$3.27 per share, to convert the liability which resulted in us recording
$607,289 of loan fees.  In addition this same placement agent was paid cash
commission and fees of $68,300.




On
September 26, 2008 the Company issued 50,400 shares of the Company’s common
stock to a placement agent for settlement of a liability incurred in a prior
period.   In accordance with an agreement with this placement agent
the number of shares was determined by converting the cost of the services to
common stock at $.70 per share.  However, in accordance with generally
accepted accounting principles, the Company used the trading price of the stock
on the settlement date, which was $2.50 per share, to record the expense related
to this liability.  Since $15,000 was recorded as expense in a previous
period, this resulted in additional expense of $111,000 in 2008.





On
September 30, 2008 the Company sold 25,000 shares of its common stock for
$25,000.  As part of this transaction, a warrant was issued to purchase an
additional 12,500 shares of common stock at $.70.  This warrant vested
immediately and expires in 5 years.





During
2008, the holders of $1,598,232 of short term convertible notes along with the
accrued interest of $37,368 was converted into 1,635,600 shares of common stock
..





On
October 9, 2008 the Company issued 5,000 shares of common stock to a vendor for
computer software services valued at the trading price of the common stock on
the date of the transactions.





During
October 2008 the Company sold to five different investors, an aggregate of
155,000 shares of its common stock for $155,000. As part of these transactions,
warrants were issued to the investors to purchase an additional 77,500 shares of
common stock at $0.70 per share.





On
October 22, 2008 $25,000 of principal from the short term convertible notes was
converted into 25,000 shares of common stock and the related accrued interest of
$904 was also converted into 904 shares of common stock.





In
December 2008 the Company sold to four different investors, an aggregate of
25,000 shares of its common stock for $25,000. As part of these transactions,
warrants were issued to the investors to purchase an additional 25,000 shares of
common stock at $1.00 per share.




On
January 5, 2009, we issued 1,000 shares of common stock to an individual for
services rendered with setting up our debit card program used for paying our
sales representatives valued at $1.00 per share





On
January 12, 2009 we issued 25,000 shares of common stock for cash at $0.80 per
share to an accredited investor.





In
January 2009, we issued 10,000 shares of our common stock for services provided
as a commission for assisting the Company with fund raising. The shares were
valued at $1.00 per share.





On
February 11, 2009, we issued 52,000 shares of our common stock for services
rendered in connection with our convertible bridge loans procured during the
fourth quarter 2008. -These shares were valued at $1.00 per share.





On
February 18, 2009, we issued 5,000 shares of stock as compensation to an
employee with a value of $1.00 per share.





On April
6, 2009 three individual warrant holders exercised the cashless option and
converted warrants for 571,429, 142,857 and 86,786 shares of our common stock
into 189,086, 47,276 and 48,504 of the Company’s common stock,
respectively.





On April
14 and April 24, 2009 two individual warrant holders exercised the cashless
option and converted warrants for 97,714 and 40,400 shares of our common stock
into 36,160 and 39,920 shares of Company’s common stock,
respectively.





On April
15, 2009, the Company issued 25,000 shares of common stock at $1.44 per share
value for professional services received.


F-24





On April
30, 2009, the Company issued 126,988 unrestricted shares of common stock in lieu
of $198,101 of cash commissions earned by 16 different independent sales
representatives.





On May 1,
2009, the Company issued 70,000 unrestricted shares of common stock in payment
of $101,100 of professional services received.





On May
21, 2009, the Company issued 2,500 shares of common stock valued at $1.00 as
compensation to an employee.





On May
22, 2009, the Company issued 14,514 unrestricted shares of common stock in lieu
of $14,514 of cash commissions earned by 16 different independent sales
representatives.





On June
1, 2009, the Company issued 15,000 unrestricted shares of common stock and
40,000 shares of restricted common stock in lieu of $55,000 of cash commissions
earned by 4 different independent sales representatives.





On June
2, 2009, the Company issued 200,000 shares of unrestricted common stock for
professional services received with a value of $202,000.





On June
9, 2009, the Company issued 15,000 unrestricted shares of common stock and
35,000 shares of restricted common stock in lieu of $61,000 of cash commissions
earned by 2 different independent sales representatives.





On June
25, 2009, the Company issued 2500 unrestricted shares of common stock and 7,000
shares of restricted common stock in lieu of $9,500 of cash commissions earned
by 2 different independent sales representatives.





On June
25, 2009, the Company issued 100,000 unrestricted common stock valued at $84,000
for professional services received.





On July
6, 2009, the Company issued 60,000 restricted shares of the Company’s common
stock valued at $13,162 for professional services received.





On July
8, 2009, the Company issued 350,000 unrestricted shares of the Company’s common
stock valued at $96,520 for professional services received.





On July
8, 2009, the Company issued 5,000 restricted shares of the Company’s common
stock valued at $1,016 for professional services received.





On August
7, 2009, the Company issued 100,000 shares of the Company’s unrestricted common
stock valued at $20,715 for professional services received.





On August
10, 2009, the Company issued 250,000 shares of the Company’s unrestricted common
stock valued at $47,079 for professional services received.





On August
18, 2009, the Company issued 1,000 shares of the Company’s restricted common
stock valued at $180 to a current shareholder for compensation.





On August
20, 2009, the Company issued 100,000 shares of the Company’s unrestricted common
stock valued at $16,000 for professional services received.





On
September 1, 2009, the Company issued 250,000 shares of the Company’s
unrestricted common stock valued at $47,500 for professional services
received.





On
October 1, 2009, the Company issued 1,000,000 shares of the Company’s
unrestricted common stock valued at $140,000 for professional services
received.





During
October 2009, the company sold 8,000,000 shares of common stock for $800,000 to
Zurvita Holdings, Inc., a related party, as part of the sale of Local Ad Link
assets.


F-25





On
October 9, 2009 (the “First Closing Date”), the Company entered into a
Securities Purchase Agreement (the “ Purchase Agreement”) with Zurvita Holdings
Inc. (“Zurvita”), pursuant to which the Zurvita agreed to purchase an aggregate
of 8,000,000 shares of common stock of the Company at a price per share of $0.10
for aggregate consideration of $800,000.  The closing of the transaction
was subject to certain conditions, including but not limited to, the acquisition
of certain software assets the Company by Omni (as described more fully above)
and the Zurvita’s entry into a license agreement with Omni covering such
software (see Note 16).





Pursuant
to the terms of the Purchase Agreement, on the First Closing Date, the Zurvita
purchased 3,000,000 shares of common stock.  In addition, Zurvita agreed to
purchase an additional 2,000,000 shares on the date on which Zurvita was able to
sell ads (the “Second Closing Date”). Zurvita agreed to acquire 1,000,000 shares
on October 23, 2009 (the “Third Closing Date”) and 2,000,000 shares on the date
on which the entire sales, operational and technical transition has taken place
allowing Omni and Zurvita to operate independently on their own platform, which
occurred November 1, 2009





During
the twelve months ended December 31, 2009, the Company had 31 of our 12%
convertible notes converted into shares of our common stock by 30 individual
note holders as follows:


F-26





NOTE CONVERSION SCHEDULEConversion
                                                  Date
                                                
                                                Amount
                                                  Converted
                                                
                                                
                                                Shares
                                                
                                                
                                                Interest
                                                
                                                
                                                Shares
                                                
                                                
                                                Conversion
                                                  Rate
                                                
                                                Original
                                                  Note
      DateQTR
      11/30/2009
                                                
                                                $
                                                50,000
                                                
                                                
                                                
                                                71,429
                                                
                                                
                                                $
                                                6,283
                                                
                                                
                                                
                                                8,976
                                                
                                                
                                                
                                                0.70
                                                
                                                12/28/20072/25/2009
                                                
                                                
                                                105,000
                                                
                                                
                                                
                                                150,000
                                                
                                                
                                                
                                                13,727
                                                
                                                
                                                
                                                19,609
                                                
                                                
                                                
                                                0.70
                                                
                                                12/28/20073/9/2009
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                71,429
                                                
                                                
                                                
                                                3,617
                                                
                                                
                                                
                                                5,167
                                                
                                                
                                                
                                                0.70
                                                
                                                7/17/2008Q1
      TOTAL
                                                
                                                $
                                                205,000
                                                
                                                
                                                
                                                292,858
                                                
                                                
                                                $
                                                23,627
                                                
                                                
                                                
                                                33,752QTR
      24/6/2009
                                                
                                                $
                                                75,000
                                                
                                                
                                                
                                                107,143
                                                
                                                
                                                $
                                                6,775
                                                
                                                
                                                
                                                9,679
                                                
                                                
                                                
                                                0.70
                                                
                                                7/7/20084/6/2009
                                                
                                                
                                                200,000
                                                
                                                
                                                
                                                285,714
                                                
                                                
                                                
                                                17,533
                                                
                                                
                                                
                                                25,048
                                                
                                                
                                                
                                                0.70
                                                
                                                7/15/20084/6/2009
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                142,857
                                                
                                                
                                                
                                                8,833
                                                
                                                
                                                
                                                12,619
                                                
                                                
                                                
                                                0.70
                                                
                                                7/15/20084/20/2009
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                71,429
                                                
                                                
                                                
                                                7,983
                                                
                                                
                                                
                                                11,405
                                                
                                                
                                                
                                                0.70
                                                
                                                12/28/20074/27/2009
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                71,429
                                                
                                                
                                                
                                                7,366
                                                
                                                
                                                
                                                10,905
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/27/2009
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                142,857
                                                
                                                
                                                
                                                15,267
                                                
                                                
                                                
                                                21,810
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/6/2009
                                                
                                                
                                                5,000
                                                
                                                
                                                
                                                7,143
                                                
                                                
                                                
                                                728
                                                
                                                
                                                
                                                1,040
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/17/2009
                                                
                                                
                                                5,000
                                                
                                                
                                                
                                                7,143
                                                
                                                
                                                
                                                747
                                                
                                                
                                                
                                                1,067
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/22/2009
                                                
                                                
                                                5,000
                                                
                                                
                                                
                                                7,143
                                                
                                                
                                                
                                                755
                                                
                                                
                                                
                                                1,079
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/6/2009
                                                
                                                
                                                25,000
                                                
                                                
                                                
                                                35,714
                                                
                                                
                                                
                                                3,642
                                                
                                                
                                                
                                                5,202
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/17/2009
                                                
                                                
                                                25,000
                                                
                                                
                                                
                                                35,714
                                                
                                                
                                                
                                                3,733
                                                
                                                
                                                
                                                5,333
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20084/22/2009
                                                
                                                
                                                25,000
                                                
                                                
                                                
                                                35,714
                                                
                                                
                                                
                                                3,775
                                                
                                                
                                                
                                                5,393
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20085/6/2009
                                                
                                                
                                                10,000
                                                
                                                
                                                
                                                14,286
                                                
                                                
                                                
                                                1,557
                                                
                                                
                                                
                                                2,224
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20085/6/2009
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                71,429
                                                
                                                
                                                
                                                7,783
                                                
                                                
                                                
                                                11,119
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20085/1/2009
                                                
                                                
                                                300,000
                                                
                                                
                                                
                                                428,571
                                                
                                                
                                                
                                                29,600
                                                
                                                
                                                
                                                42,286
                                                
                                                
                                                
                                                0.70
                                                
                                                7/7/20085/6/2009
                                                
                                                
                                                200,000
                                                
                                                
                                                
                                                285,714
                                                
                                                
                                                
                                                20,200
                                                
                                                
                                                
                                                28,857
                                                
                                                
                                                
                                                0.70
                                                
                                                7/7/20085/6/2009
                                                
                                                
                                                200,000
                                                
                                                
                                                
                                                285,714
                                                
                                                
                                                
                                                31,133
                                                
                                                
                                                
                                                44,476
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20085/7/2009
                                                
                                                
                                                30,000
                                                
                                                
                                                
                                                42,857
                                                
                                                
                                                
                                                2,750
                                                
                                                
                                                
                                                3,929
                                                
                                                
                                                
                                                0.70
                                                
                                                8/5/20085/7/2009
                                                
                                                
                                                30,000
                                                
                                                
                                                
                                                42,857
                                                
                                                
                                                
                                                2,750
                                                
                                                
                                                
                                                3,929
                                                
                                                
                                                
                                                0.70
                                                
                                                8/5/20085/7/2009
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                4,000
                                                
                                                
                                                
                                                4,000
                                                
                                                
                                                
                                                1.00
                                                
                                                1/7/20095/19/2009
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                142,857
                                                
                                                
                                                
                                                9,567
                                                
                                                
                                                
                                                13,667
                                                
                                                
                                                
                                                0.70
                                                
                                                8/5/20086/10/2009
                                                
                                                
                                                10,000
                                                
                                                
                                                
                                                14,286
                                                
                                                
                                                
                                                1,673
                                                
                                                
                                                
                                                2,390
                                                
                                                
                                                
                                                0.70
                                                
                                                1/25/20086/12/2009
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                142,857
                                                
                                                
                                                
                                                11,267
                                                
                                                
                                                
                                                16,095
                                                
                                                
                                                
                                                0.70
                                                
                                                7/7/2008Q2
      Total
                                                
                                                $
                                                1,795,000
                                                
                                                
                                                
                                                2,521,428
                                                
                                                
                                                $
                                                199,417
                                                
                                                
                                                
                                                283,552QTR
      38/4/2009
                                                
                                                $
                                                100,000
                                                
                                                
                                                
                                                285,714
                                                
                                                
                                                $
                                                18,567
                                                
                                                
                                                
                                                53,048
                                                
                                                
                                                
                                                0.35
                                                
                                                1/25/2008Q3
      Total
                                                
                                                $
                                                100,000
                                                
                                                
                                                
                                                285,714
                                                
                                                
                                                $
                                                $18,567
                                                
                                                
                                                
                                                53,048QTR
      410/21/2009
                                                
                                                $
                                                30,000
                                                
                                                
                                                
                                                300,000
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                0.10
                                                
                                                11/8/200810/22/2009
                                                
                                                $
                                                70,000
                                                
                                                
                                                
                                                700,000
                                                
                                                
                                                $
                                                15,237
                                                
                                                
                                                
                                                152,370
                                                
                                                
                                                
                                                0.10
                                                
                                                12/8/200711/11/2009
                                                
                                                $
                                                100,000
                                                
                                                
                                                
                                                1,000,000
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                0.10
                                                
                                                11/17/200812/16/2009
                                                
                                                $
                                                100,000
                                                
                                                
                                                
                                                1,000,000
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                0.10
                                                
                                                12/4/2008Q4
      Total
                                                
                                                $
                                                300,000
                                                
                                                
                                                
                                                3,000,000
                                                
                                                
                                                $
                                                15,237
                                                
                                                
                                                
                                                152,3702009
      Total
                                                
                                                $
                                                2,400,000
                                                
                                                
                                                
                                                6,100,000
                                                
                                                
                                                $
                                                256,848
                                                
                                                
                                                
                                                522,722





F-27





Warrants





The
following is a summary of the Company’s outstanding common stock purchase
warrants:





Outstanding
                                      
                                      
                                      
                                      
                                      
                                      Transferred/
                                      
                                      
                                      OutstandingExercise Price
                                      
                                      December 31, 2008
                                      
                                      
                                      Issued in 2009
                                      
                                      
                                      Exercised
                                      
                                      
                                      December 31, 2009$
                                      0.01
                                      
                                      
                                      153,920
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (40,400
                                      )
                                      
                                      
                                      113,520
                                      (1)$
                                      0.10
                                      
                                      
                                      -
                                      
                                      
                                      
                                      109,008,215
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      109,008,215$
                                      0.30
                                      
                                      
                                      30,300
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      30,300$
                                      0.50
                                      
                                      
                                      101,000
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      101,000
                                      (1)$
                                      0.70
                                      
                                      
                                      5,087,484
                                      
                                      
                                      
                                      29,135,985
                                      
                                      
                                      
                                      (32,979,353
                                      )(2)
                                      
                                      
                                      1,244,116$
                                      0.90
                                      
                                      
                                      -
                                      
                                      
                                      
                                      1,782,000
                                      
                                      
                                      
                                      (1,782,000
                                      )
                                      
                                      
                                      -$
                                      0.93
                                      
                                      
                                      4,026,646
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (898,786
                                      )
                                      
                                      
                                      3,127,860$
                                      1.00
                                      
                                      
                                      503,247
                                      
                                      
                                      
                                      2,779,999
                                      
                                      
                                      
                                      (540,000
                                      )
                                      
                                      
                                      2,743,246$
                                      2.40
                                      
                                      
                                      132,310
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      132,310
                                      (1)10,034,907
                                      
                                      
                                      
                                      142,706,199
                                      
                                      
                                      
                                      (36,240,539
                                      )
                                      
                                      
                                      116,500,567





(1)
            The
      chart above includes in the outstanding December 31, 2007 balance warrants
      to purchase BOOMj.com common stock.  The BOOMj.com warrants to
      purchase common stock should have been exchanged for warrants of the
      Company.  On June 28, 2008, the Company issued replacement warrants
      for the BOOMj.com warrants.   The outstanding warrants as of
      December 31, 2009, therefore, include an additional 260,442 warrants
      issued to replace the warrants previously issued by Boomj.com, Inc., which
      new warrants were issued at a rate of 2.02 shares of the Company common
      stock for each warrant share of BOOMj.com. The Company has reserved a
      sufficient number of shares of authorized common stock for issuance upon
      exercise of the outstanding
warrants.





(2)
            18,321,038
      of these warrants were surrendered per the terms of the Local Ad Link,
      Inc. sale to Omni-Reliant Holdings in October 2009, see Note 16. The
      exercise price of the warrants and conversion price of some of the
      convertible notes, for the portion that remained outstanding after the
      LocalAdLink transaction, was reduced to $0.10 as a result of subsequent
      stock issuances in October 2009.





2008
Stock Option Plan





On
September 11, 2008, our Board of Directors adopted Beyond Commerce’s 2008 Equity
Incentive Plan, and on June 12, 2009 the Board amended the plan to increase the
number of shares of common stock that may be issued under the plan from
3,500,000 to 7,000,000.   Effective April 1, 2010, the Board of
Directors further increased the number of shares issuable under the 2008 Equity
Incentive Plan by 10,000,000 to a total of 17,000,000 shares.  On July 24,
2009 the Plan was submitted to, and  approved by our stockholders at
the 2009 Annual Meeting of stockholders.  Under the 2008 Equity Incentive
Plan, we are currently authorized to grant options, restricted stock and stock
appreciation rights to purchase up to 17,000,000 shares of common stock to our
employees, officers, directors, consultants and advisors.  Awards under the
plan may consist of stock options (both non- qualified options and options
intended to qualify as “Incentive Stock Options” under Section 422 of the
Internal Revenue Code of 1986, as amended), restricted stock awards and stock
appreciation rights.




The 2008
Equity Incentive Plan is administered by our Board of Directors or a committee
appointed by the Board, which determines the persons to whom awards will be
granted, the type of award to be granted, the number of awards to be granted and
the specific terms of each grant, including the vesting thereof, subject to the
provisions of the plan.




The 2008
Equity Incentive Plan provides that the exercise price of each incentive stock
option may not be less than the fair market value of our common stock on the
date of grant (or 110% of the fair market value in the case of a grantee holding
more than 10% of our outstanding common stock).  The exercise price of a
non-qualified stock option shall be no less than the fair market value of the
common stock on the date of grant.  The maximum number of options that may
be granted in any fiscal year to any participant is 5,000,000.




The plan
also permits the grant of freestanding stock appreciation rights or in tandem
with option awards. The grant price of a stock appreciation right shall be no
less than the fair market value of a share on the date of grant of the stock
appreciation right. No stock appreciation right shall be exercisable later than
the tenth anniversary of its grant. Upon the exercise of a stock appreciation
right, a participant shall be entitled to receive common stock at a fair market
value equal to the benefit to be received by the exercise.


F-28





The plan
also provides us with the ability to grant or sell shares of common stock that
are subject to certain transferability, forfeiture, repurchase or other
restrictions.  The type of restriction, the number of shares of restricted
stock granted and other such provisions shall be determined by our Board of
Directors or its committee.




Unless
otherwise determined by our Board of Directors or its committee, awards granted
under the 2008 Equity Incentive Plan are not transferable other than by will or
by the laws of descent and distribution.




The 2008
Equity Incentive Plan provides that, except as set forth in an individual award
agreement, upon the occurrence of a corporate transaction: (1) our Board of
Directors or its committee shall notify each participant at least thirty (30)
days prior to the consummation of the corporate transaction or as soon as may be
practicable and (2) all options and stock appreciation rights shall terminate
and all restricted stock shall be forfeited immediately prior to the
consummation of such corporate transaction unless the committee determines
otherwise in its sole discretion.  A “corporate transaction” means (1) a
liquidation or dissolution of the company; (2) a merger or consolidation of the
company with or into another corporation or entity (other than a merger with a
wholly-owned subsidiary); or (3) a sale of all or substantially all of the
assets of the company.




Our Board
of Directors may alter, amend or terminate the plan in any respect at any time,
but no alteration, amendment or termination will adversely affect in any
material way any award previously granted under the plan, without the written
consent of the participant holding such award.




Stock Options
Granted





On
September 11, 2008, the Board of Directors approved the issuance of stock
options as described below in accordance with the 2008 Equity Incentive
Plan. The employee options have a cliff vesting schedule over a three year
period that vest one third after one year of service and then 4.2% per month
over the remaining twenty-four months. Options issued to non-employees for
meeting performance-based goals vest immediately.





Option Group
                                                  
                                                  Number of
                                                    Stock Options
                                                    Issued
                                                  
                                                  Exercise Price
                                                  
                                                  Expiration$
                                                  0.10-0.49
                                                  
                                                  
                                                  890,500
                                                  
                                                  $
                                                  0.10-.49
      per share
                                                  
                                                  September  10,
      2019$
                                                  0.50-0.69
                                                  
                                                  
                                                  863,274
                                                  
                                                  $
                                                  0.50-.69
      per share
                                                  
                                                  September  10,
      2019$
                                                  0.70-0.89
                                                  
                                                  
                                                  1,191,102
                                                  
                                                  $
                                                  0.70-.89
      per share
                                                  
                                                  September  10,
      2019$
                                                  0.90-0.99
                                                  
                                                  
                                                  666,844
                                                  
                                                  $
                                                  0.90-.99
      per share
                                                  
                                                  September  10,
      2019$
                                                  1.00-1.25
                                                  
                                                  
                                                  915,194
                                                  
                                                  $
                                                  1.00-1.25
      per share
                                                  
                                                  September  10,
      2019$
                                                  1.26-1.70
                                                  
                                                  
                                                  334,637
                                                  
                                                  $
                                                  1.26-1.70
      per share
                                                  
                                                  September  10,
      2019





The
estimated fair value of the aforementioned options was calculated using the
Black-Scholes model.  Consequently, the Company recorded a share-based
compensation expense of $1,883,702 for the year ended December 31, 2009. Total
compensation costs to be recognized over the next 2.4 weighted average number of
years will be $335,481 for all non-vested employee options as of December 31,
2009. The following table summarizes the weighted average of the assumptions
used in the method.





Year ending
                    December 31,
                    2009
                  
                  Year ending
                    December 31,
                    2008Expected
      volatility
                  
                  100%
                  
                  100%Dividend
      yield
                  
                  n/a
                  
                  n/aExpected
      terms (in years)
                  
                  5-10
                  
                  5-10Risk-free
      rate
                  
                  1.50%-2.4%
                  
                  1.50%-2.9%


F-29




OPTIONS
      OUTSTANDING
                  
                  
                  OPTIONS
      EXERCISABLERange
      of Exercise Prices
                  
                  
                  Number
      of Outstanding Shares at December 31,2008
                  
                  Weighted
      Average Remaining Contract Life
                  
                  Weighted
      Average Exercise Price
                  
                  
                  Number
      Exercisable at
                    December
      31,2008
                  
                  
                  Weighted
      Average Exercise Price$
                  0.70
                  
                  
                  
                  450,000
                  
                  9.75
      years
                  
                  $
                  0.70
                  
                  
                  
                  69,300
                  
                  
                  $
                  0.70$
                  0.80
                  
                  
                  
                  20,000
                  
                  9.75
      years
                  
                  $
                  0.80
                  
                  
                  
                  --
                  
                  
                  $
                  0.80$
                  0.90
                  
                  
                  
                  451,049
                  
                  9.75
      years
                  
                  $
                  0.90
                  
                  
                  
                  448,584
                  
                  
                  $
                  0.90$
                  1.01
                  
                  
                  
                  73,271
                  
                  9.75
      years
                  
                  $
                  1.01
                  
                  
                  
                  56,502
                  
                  
                  $
                  0.90$
                  1.50
                  
                  
                  
                  120,000
                  
                  9.75
      years
                  
                  $
                  1.50
                  
                  
                  
                  103,300
                  
                  
                  $
                  1.50
  The
weighted-average grant-date fair value of the option granted during the years
ending December 31, 2008 was $0.89.
  OPTIONS
      OUTSTANDING
                  
                  
                  OPTIONS
      EXERCISABLERange
      of Exercise Prices
                  
                  
                  Number
      of Outstanding Shares at December 31,2009
                  
                  Weighted
      Average Remaining
                    Contract
                    Life
                  
                  Weighted
      Average Exercise Price
                  
                  
                  Number
      Exercisable
                    at
                    December
      31,2009
                  
                  
                  Weighted
      Average Exercise Price$
                  0.10-0.49
                  
                  
                  
                  468,500
                  
                  9.71
      years
                  
                  $
                  0.12
                  
                  
                  
                  -
                  
                  
                  $
                  -$
                  0.50-0.69
                  
                  
                  
                  873,274
                  
                  9.16
      years
                  
                  $
                  0.55
                  
                  
                  
                  -
                  
                  
                  $
                  -$
                  0.70-0.89
                  
                  
                  
                  1,098,602
                  
                  8.81
      years
                  
                  $
                  0.74
                  
                  
                  
                  97,072
                  
                  
                  $
                  .71$
                  0.90-0.99
                  
                  
                  
                  686,844
                  
                  9.15
      years
                  
                  $
                  0.90
                  
                  
                  
                  95,479
                  
                  
                  $
                  .90$
                  1.00-1.25
                  
                  
                  
                  770,694
                  
                  9.30
      years
                  
                  $
                  1.00
                  
                  
                  
                  28,396
                  
                  
                  $
                  1.01$
                  1.26-1.70
                  
                  
                  
                  219,637
                  
                  9.31years
                  
                  $
                  1.42
                  
                  
                  
                  -
                  
                  
                  $
                  -
 
 The
weighted-average grant-date fair value of the option granted during the years
ending December 31, 2009 was $0.74.




The
following table summarizes the Company’s stock option activity and related
information:







Outstanding
                                            
                                            
                                            Issued
                                              Twelve months
                                            
                                            
                                            Forfeited
                                              Twelve
      months
                                            
                                            
                                            OutstandingOption Group
                                            
                                            
                                            December 31, 2008
                                            
                                            
                                            ended
                                              December 31, 2009
                                            
                                            
                                            ended
                                              December 31, 2009
                                            
                                            
                                            December 31, 2009$
                                            0.10-0.49
                                            
                                            
                                            
                                            
                                            
                                            
                                            964,500
                                            
                                            
                                            
                                            (496,000
                                            )
                                            
                                            
                                            468,500$
                                            0.50-0.69
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,091,658
                                            
                                            
                                            
                                            (218,384
                                            )
                                            
                                            
                                            873,274$
                                            0.70-0.89
                                            
                                            
                                            
                                            470,000
                                            
                                            
                                            
                                            930,547
                                            
                                            
                                            
                                            (301,945
                                            )
                                            
                                            
                                            1,098,602$
                                            0.90-0.99
                                            
                                            
                                            
                                            451,049
                                            
                                            
                                            
                                            532,441
                                            
                                            
                                            
                                            (296,646
                                            )
                                            
                                            
                                            686,844$
                                            1.00-1.25
                                            
                                            
                                            
                                            73,271
                                            
                                            
                                            
                                            1,277,500
                                            
                                            
                                            
                                            (580,077
                                            )
                                            
                                            
                                            770,694$
                                            1.26-1.70
                                            
                                            
                                            
                                            120,000
                                            
                                            
                                            
                                            410,170
                                            
                                            
                                            
                                            (310,533
                                            )
                                            
                                            
                                            219,6371,114,320
                                            
                                            
                                            
                                            5,206,816
                                            
                                            
                                            
                                            (2,203,585
                                            )
                                            
                                            
                                            4,117,551





The
weighted-average grant-date fair value of the option granted during the years
ending December 31, 2009 was $0.74 and $0.89 at December 31, 2008.





The total
number options vested for the years ended December 31, 2009 and 2008 were
220,947 and 677,686, respectively. The total fair value of the vested options
for the year ended December 31, 2009 was $220,947 and their weighted average
exercise price was $0.82.  Non vested options for the years ended
December 31,2009 and 2008 were 3,896,604 and 436,634. The total number of
options forfeited is 2,203,585 and 0 for the years ended December 31, 2009 and
2008, respectively. No options have been exercised since the inception of the
plan.




Convertible
Securities
 
 As of
December 31, 2009, the Company had an aggregate number of shares of common
stock issued as well as instruments convertible or exercisable into common
shares that exceeded the number of the Company’s total authorized common shares
by approximately 35,800,000 shares. The Company determined that the excess
shares were related to warrants issued in 2009. These excess shares were
triggered by the Company issuing shares of stock in October 2009 at $0.10 per
share.  This caused all convertible instruments with reset provisions
to reset the exercise price and conversion price to $0.10, which triggered
provisions within the respective instruments that greatly increased the number
of potential shares issuable on their exercise or conversion.  Based
upon FASB accounting guidance, the Company determined the fair value of these
excess shares using the Black-Scholes valuation model. Based upon the fair value
of these excess shares in October 2009, the Company recorded a liability of
approximately $4,600,000.  The Company revalued this liability at
December 31, 2009 and determined the value to be approximately
$950,000.  The change in fair value of approximately $3,660,000 for
the period ended December 31, 2009 was recognized in the statement of operations
under the income related to derivative line item.




Dividends





The
Company anticipates that all future earnings will be retained to finance future
growth.  The payment of dividends, if any, in the future to the
Company’s common stockholders is within the discretion of the Board of Directors
of the Company and will depend upon the Company’s earnings, its capital
requirements and financial condition and other relevant factors.  The
Company has not paid a dividend on its common stock and does not anticipate
paying any dividends on its common stock in the foreseeable future but instead
intends to retain all earnings, if any, for use in the Company’s business
operations. The Company
is restricted from paying dividends in cash while any principal or accrued
interest is outstanding under the OmniReliant Holdings Convertible Notes (see
Note 8).





NOTE
9 – INCOME TAXES


A
reconciliation of the statutory income tax rates and the Company’s effective tax
rate is as follows:





2009
                    
                    
                    2008Statutory
      U.S. federal rate
                    
                    
                    (34.00
                    )%
                    
                    
                    (34.00
                    )%Permanent
      differences
                    
                    
                    -
                    
                    
                    
                    -Valuation
      allowance
                    
                    
                    34.00
                    %
                    
                    
                    34.00
                    %Provision
      for income tax expense(benefit)
                    
                    
                    0.0
                    %
                    
                    
                    0.0
                    %




F-30





The tax
effects of the temporary differences and carry forwards that give rise to
deferred tax assets consist of the following:




2009
                  
                  
                  2008Deferred
      tax assets:Net
      operating loss carry-forwards
                  
                  $
                  8,399,432
                  
                  
                  $
                  5,106,757Unamortized
      start up costs
                  
                  
                  18,000
                  
                  
                  
                  18,000Accrued
      expenses
                  
                  
                  1,428,264
                  
                  
                  
                  219,729Non-cash
      compensation
                  
                  
                  1,439,514
                  
                  
                  
                  678,392Derivative
      liabilities
                  
                  
                  1,038,126
                  
                  
                  
                  606,925Deferred
      revenue
                  
                  
                  301,252
                  
                  
                  
                  242,985Total
      deferred tax assets
                  
                  $
                  12,624,588
                  
                  
                  $
                  6,872,788Deferred
      tax liabilitiesBeneficial
      conversion features
                  
                  
                  -
                  
                  
                  
                  (426,016
                  )Deferred
      commissions
                  
                  
                  (117,460
                  )
                  
                  
                  (103,591
                  )Total
      deferred tax liabilities
                  
                  $
                  (117,460
                  )
                  
                  $
                  (529,607
                  )Valuation
      allowance
                  
                  
                  (12,507,128
                  )
                  
                  
                  (6,343,181
                  )Net
      deferred tax asset
                  
                  $
                  -
                  
                  
                  $
                  -





At
December 31, 2009 the Company had estimated U.S. federal net operating losses of
approximately $23,849,000 for income tax purposes which will expire between
2017 and 2019.  For financial reporting purposes, the entire amount of
the net deferred tax assets has been offset by a valuation allowance due to
uncertainty regarding the realization of the assets.  The net change
in the total valuation allowance for the year ended December 31, 2009 was an
increase of $6,163,947.  The Company follows FASC 740-10-25 P which
requires a company to evaluate whether a tax position taken by the company will
“more likely than not” be sustained upon examination by the appropriate tax
authority.  The Company has analyzed filing positions in all of the
federal and state jurisdictions where it is required to file income tax returns,
as well as all open tax years in these jurisdictions. The Company believes that
its income tax filing positions and deductions would be sustained on audit and
does not anticipate any adjustments that would result in a material change to
its financial position.  Therefore, no reserves for uncertain income
tax positions have been recorded.




The
Company may not be able to utilize the net operating loss carryforwards for its
US income taxes in future periods should it experience a change in ownership as
defined in Section 382 of the Internal Revenue Code
(“IRC”).  Under section 382, should the Company experience a more than
50% change in its ownership over a 3 year period, the Company would be limited
based on a formula as defined in the IRC to the amount per year it could utilize
in that year of the net operating loss carryforwards.   As of
December 31, 2009 the Company had not performed an analysis to determine if the
Company was subject to the provisions of Section 382.




The
following table summarizes the activity related to the Company's gross
unrecognized tax benefits:




AmountGross
      unrecognized tax benefits at December 31, 2008
                    
                    
                    -Increases
      in tax positions for current year
                    
                    
                    -Settlements
                    
                    
                    -Lapse
      in statute of limitations
                    
                    
                    -Gross
      unrecognized tax benefits at December 31, 2009
                    
                    
                    -





The
Company is subject to U.S. federal income tax including state and local
jurisdictions. Currently, no federal or state income tax returns are under
examination by the respective taxing jurisdictions.




The
Company's accounting policy is to recognize interest and penalties related to
uncertain tax positions in income tax expense. The Company has not accrued
interest for any periods.


F-31





NOTE
10 COMMITMENTS and
CONTINGENCIES





Legal
Matters





In 2008
the Company filed suit against its former President, CEO for breach of
confidentiality and non-compete while employed and also post employment, breach
of fiduciary duty and other matters, and the Company is seeking to enforce
certain non-compete agreements.  The former CEO subsequently
counter-sued the Company for breach of contract, breach of implied covenant of
good faith and fair dealing and other matters.  The former CEO is
seeking to be awarded $75,000 in cash plus at least 3.3 million shares of stock
of the Company.  As of December 31, 2009 no amounts had been recorded
by the Company as of December 31, 2009 and the date of these financial
statements.





Operating
Lease





The
Company leases certain office space, under operating leases which generally
require the Company to pay taxes, insurance and maintenance expenses related to
the leased property.  The leases for office space have lease extension
renewal options for an added two to three years at fair market rent values. The
Company believes that in the normal course of business, leases will be renewed
or replaced by other leases.  In December 2007 the Company entered
into a four year lease for 4,560 square feet in Henderson, Nevada which houses
its corporate office.





Total
rent expense incurred by the Company, which includes the leases above and sundry
month to month rental expenditures was $329,002 and $225,006 for the
twelve  month period ended December 31, 2009 and 2008, respectively.
The Company signed an amendment to its lease in Henderson, Nevada in February
2009, effective March 16, 2009 for an additional 5,634 square feet of office
space adjacent to the current office.  This amendment ties to the
expiration of the present lease and will expire January 31, 2012.  The
Company closed its California office in May of 2009The Company has future
minimum lease obligations as follows:





Twelve months ending
                        December 31,
                      
                      20092010
                      
                      $
                      308,0492011
                      
                      
                      317,4212012
                      
                      
                      326,9402013
                      
                      
                      27,245Total
                      
                      $
                      979,655





Tax
Lien





On
February 17, 2010, the Internal Revenue Service placed a federal tax lien of
$756, 711 against all of the property and rights to the property of Boomj.com
for unpaid federal payroll withholding taxes for the year ended December 31,
2009.





NOTE 11 – SIGNIFICANT
CUSTOMERS AND SUPPLIERS





The
Company will derive a significant portion of its revenue from e-commerce based
customers. This is a very competitive market with many suppliers for the
products the Company offers. The Company believes that it can replace any one
product line with another supplier without any disruptions in
activity.





NOTE 12 – SEGMENT
REPORTING





Beyond
Commerce, Inc managed its operations through three business segments:
BOOMj.com  dba i-SUPPLY, Local Ad Link and KaChing KaChing . Each unit
owns and operates the segments under the respective names.





The
Company evaluates performance based on net operating profit. Administrative
functions such as finance, treasury, and information systems are centralized and
although they are not considered operating segments are presented below for
informative purposes. However, where applicable, portions of the administrative
function expenses are allocated between the operating segments. The operating
segments do share facilities in Henderson NV. In the event any supplies and/or
services are provided to one operating segment by the other, the transaction is
valued according to the company’s transfer policy, which approximates market
price. The costs of operating the segments are captured discretely within each
segment. The Company’s leasehold improvements, property, computer equipment,
inventory, and results of operations are captured and reported discretely within
each operating segment.


F-32





Summary financial
information for the two reportable segments is as follows:





2009
                              
                              
                              2008(As
      Adjusted)Operations:
      BOOMj.com dba i-SUPPLYNet
      sales
                              
                              $
                              660,069
                              
                              
                              $
                              1,060,272Gross
      Margin
                              
                              
                              559,940
                              
                              
                              
                              (23,102
                              )Depreciation
                              
                              
                              193,458
                              
                              
                              
                              181,134Assets
                              
                              
                              427,489
                              
                              
                              
                              598,016Capital
      Expenditures
                              
                              
                              11,333
                              
                              
                              
                              111,882Net
      Loss
                              
                              
                              5,293,124
                              
                              
                              
                              7,375,948Operations:
      LocalAdLink (Discontinued)Net
      sales
                              
                              $
                              13,049,619
                              
                              
                              
                              782,959Gross
      Margin
                              
                              
                              2,493,551
                              
                              
                              
                              (308,765
                              )Depreciation
                              
                              
                              57,065
                              
                              
                              
                              1,668Assets
                              
                              
                              478,976
                              
                              
                              
                              644,927Capital
      Expenditures
                              
                              
                              502,885
                              
                              
                              
                              10,000Net
      Loss
                              
                              
                              7,580,839
                              
                              
                              
                              1,015,583Operations:
      KaChing KaChingNet
      sales
                              
                              $
                              243,783
                              
                              
                              
                              -Gross
      Margin
                              
                              
                              134,264
                              
                              
                              
                              -Depreciation
                              
                              
                              (5,415)
                              
                              
                              
                              -Assets
                              
                              
                              210,122
                              
                              
                              
                              -Capital
      Expenditures
                              
                              
                              91,870
                              
                              
                              
                              -Net
      Loss
                              
                              
                              365,989
                              
                              
                              
                              -ConsolidatedConsolidated
      Operations:Net
      sales
                              
                              $
                              13,953,470
                              
                              
                              $
                              1,843,231Gross
      Margin
                              
                              
                              3,175,210
                              
                              
                              
                              (331,868
                              )Other
      operating expenses
                              
                              
                              14,635,318
                              
                              
                              
                              8,265,451Depreciation
                              
                              
                              255,938
                              
                              
                              
                              182,802Non-operating
      income (expense)
                              
                              
                              60,016
                              
                              
                              
                              (4,815,172
                              )Loss
      from operations before income taxes
                              
                              
                              11,656,030
                              
                              
                              
                              13,595,294Assets
                              
                              
                              1,204,340
                              
                              
                              
                              1,242,940Basic
      & Diluted Net Loss Per Share
                              
                              
                              (0.25
                              )
                              
                              
                              (0.35
                              )Capital
      Expenditures
                              
                              
                              606,088
                              
                              
                              
                              121,882




F-33





NOTE 13 – RELATED PARTIES
(not described elsewhere)





Rhett
McNulty is the son of Robert J. McNulty, our CEO. Rhett McNulty owns Linlithgow
Holdings, LLC, which is the Company’s largest shareholder. Rhett McNulty is also
the Chief Operating Officer and an 18% owner of Hype/Swapin Networks, Inc. In
December 2006 Boomj.com, Inc. purchased its proprietary website software from
Hype/Swapin Networks, Inc. for 500,000 shares of Boomj Series A Preferred stock.
Prior to the acquisition of BOOMj these 500,000 Series A Preferred shares were
converted into 550,000 shares of Boomj.com’s common stock. In connection the
acquisition of BOOMj.com, we issued 1,111,000 shares of our common stock in
exchange for these 550,000 shares.





On May
20, 2009, the Company executed a convertible promissory note (the “Note”) in the
principal amount of $1,600,000 payable to Linlithgow
Holdings.  Pursuant to the Note, the Company promises to pay to
Linlithgow Holdings $1,600,000 in cash on November 20, 2009. A principal payment
was made on July 21, 2009 of $266,667 leaving a balance of $1,333,333. The Note
is convertible at any time at a conversion price of $1.00 per share which was
reset to $0.70 due to a subsequent offering.  The Note bears an
initial interest rate of 1.5% for the first month and increases by 1.5% per
month until maturity. After the maturity date, the default rate of interest
becomes 18% per month or the highest rate allowed by law, whichever is lower,
until the date the Note amount is actually paid. Further, as part of the
consideration provided to the holder for the Note, the Holder also received a
warrant for the purchase of up to 1,782,000 shares of the Company’s common stock
at an exercise price of $0.90 per share. The warrants are exercisable, in whole
or in part, any time from and after the date of issuance of the warrant. Due to
a subsequent ratchet adjustment based on the issuance of warrants at a lower per
share price, the exercise price of these warrants has been adjusted to $0.70.
and the convertible note ratcheted down to $0.10 per share. This note was
subsequently extended by mutual agreement until May 26, 2010. As part of the
extension the interest rate was reduced to 6.0% , an additional 6,400,000 five
year warrants to purchase our common stock at $0.10 per share and the conversion
price was ratcheted down to $0.10 per share.





During
2009 and 2008, we paid Linlithgow Holdings a total of $215,213 and
$53,450respectively for consulting services and advertising commissions rendered
to us.  Also, our KaChing entity paid commissions $3,379 to ABV3
corporation an entity owned and controlled by our Chief Executive Officer Robert
McNulty.





In 2009
& 2008, we paid FA Corp. a total of $37,114 and $102,673 respectively for
various services provided to us by Mr. Murray Williams.  Mr. Williams
is a member of our Board of Directors and the principal stockholder of FA Corp.
Another one of our directors, Mr. Barry Falk is a partner in the law firm Irvine
Venture Law Firm. The Company paid $425 and $336 in 2009 and 2008, respectively
for legal services provided to the Company by Mr. Falk’s firm.





In 2009,
we started using a debit card issued by TAC Financial, Inc., which as of
December 31, 2009 was 85% owned by Linlithgow Holdings, LLC. Additionally, one
of our employees, Clark McNulty, the son of Robert J. McNulty, sits on the Board
of TAC Financial, Inc.  and  two members of TAC Financials
Board of Directors are the sons, (one of which is an employee of the Company),
of Robert McNulty (our Chief Executive Officer).  This company does
not pay TAC Financial for the use of the debit cards, but TAC Financial does
receive fees from the users of those cards. The Company used their VISA debit
card as a means to pay commissions to our Local Ad Link sales
representatives.  As of March 13, 2009 Linlithgow Holdings, LLC
ownership percentage of TAC Financial, Inc. was reduced to approximately
75%.





In 2009
we sold 8,000,000 shares of the Company common stock to Zurvita for $800,000
giving them a 13.6% ownership in the Company.  This transaction was
part of the asset sale of LocalAdLink. (Exhibit 10.37).  We have an
outstanding secured promissory note at December 31, 2009 with the Omni Group
(who has common ownership with Zurvita) of $1,623,322.




NOTE 14 – NET LOSS PER SHARE
OF COMMON STOCK





The
Company follows FASC 260-10 which requires presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic loss per share of
common stock is computed by dividing net loss by the weighted average number of
shares of common stock outstanding during the year.  Basic net loss
per common share is based upon the weighted average number of common shares
outstanding during the period. Dilution is computed by applying the treasury
stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock at the
average market price during the period. However, shares associated with
convertible debt, stock options and stock warrants are not included because
the inclusion would be anti-dilutive (i.e. reduce the net loss per common
share).  The total number of such stock options shares excluded from
the diluted net loss per common share presentation was 102,399,776 and
19,010,108 at December 31, 2009 and 2008, respectively.


F-34





Warrants
outstanding exercisable into 116,500,567 shares of the Company’s common stock,
options exercisable into 4,117,551 shares of the Company’s common stock and
convertible debt that is convertible into 56,366,550 shares of




Numerator





Basic and
diluted net loss per share:




2009
                    
                    
                    2008Net
      loss available to common stockholders
                    
                    $
                    (11,656,030
                    )
                    
                    $
                    (13,595,294
                    )DenominatorBasic
      and diluted weighted average number of shares outstanding
                    
                    
                    46,681,672
                    
                    
                    
                    38,580,296Basic
      and diluted net loss per share
                    
                    $
                    (0.25
                    )
                    
                    
                    (0.35
                    )




NOTE 15SUPPLEMENTAL DISCLOSURES OF
CASH FLOWS (not described elsewhere)




The
Company paid $173,654 and $48,192 for the year ended December 31, 2009 and 2008,
respectively for interest. The Company did not make any payments for income tax
during the years ended December 31, 2009 and 2008. As of December 31, 2009,
prepaid loan fees included $400,381 (net of amortization) of debt related fees,
which were paid by issuing common stock and warrants.  As of December
31, 2008 the prepaid loan fees included $263,007 (net of amortization) of debt
related fees, which were paid by issuing common stock and warrants.




NOTE 16 SALE OF ASSETS OF
LOCALADLINK





The
Company, in an attempt to monetize the current sales level within Local Ad Link,
Inc., and to  reduce its debt, began soliciting multi-level sales
company’s who might need added products to distribute.  One of these
companies was an affiliate of Omni-Reliant Holdings called Zurvita Holdings Inc,
who showed interest in a potential transaction





On
October 9, 2009, Beyond Commerce, Inc. (the “Company”) and its wholly-owned
subsidiary, LocalAdLink, Inc. (the “Sub”) entered into an asset purchase
agreement (the “Agreement”) with OmniReliant Holdings, Inc. (“Omni”) whereby the
Company and the Sub sold the LocalAdLink Software (“LAL”), including source
codes, as updated, the LAL name rights, and the LAL trademark, as well as any
additional third party codes that has been modified or integrated into the
source codes to enable the business process operations of LAL, including but not
limited to the domain URL assets (collectively, the “Software”) to Omni in
consideration for which Omni forgave $4,000,000 worth of debt in the form of
surrendered original issue discount convertible debentures and surrendered for
cancellation, warrants to purchase 18, 321,037shares of the Company’s common
stock. Additionally, as further consideration for the asset purchase, Omni
agreed to extend the maturity date on all remaining original issue discount
convertible debentures it holds that were issued by the Company until October 9,
2010 with an interest rate of 10%.


F-35





Total
assets associated with the sale were $366,977 which was software related and
sold in the transaction. In connection with the sale, the Company recorded a
gain on sale of the Local Ad Link, Inc. assets of $5,020,402.  All
liabilities associated with this division were retained by the
Company.  The agreement also required the Company to provide technical
and other support for 90 days after the transaction was
consummated.




Assets of
discontinued operations comprised of the following:





2009
                        
                        
                        2008Property,
      website & computer development
                        
                        
                        400,339
                        
                        
                        
                        -Less:
      accumulated depreciation
                        
                        
                        (33,362
                        )
                        
                        
                        -366,977
                        
                        
                        
                        -




The
following table summarized the statement of operations for the
discontinued operation interest expense is allocated based on the exchange
of convertible promissory notes with a face value of $4,000,000 from the
purchaser along with associated derivative expense associated with this
debt:




2009
                          
                          
                          2008Sales
                          
                          $
                          13,049,619
                          
                          
                          $
                          782,959Cost
      of sales
                          
                          
                          10,556,067
                          
                          
                          
                          1,091,725Gross
      Profit(Loss)
                          
                          $
                          2,493,552
                          
                          
                          $
                          (308,766
                          )Operating
      expense
                          
                          
                          (7,044,119
                          )
                          
                          
                          (653,367
                          )Operating
      Expense- Related Party
                          
                          
                          (261,609
                          )
                          
                          
                          (53,450
                          )Interest
      expense- Related Party
                          
                          
                          (1,043,088
                          )
                          
                          
                          -Derivative  expense-
      Related Party
                          
                          
                          (1,722,996
                          )
                          
                          
                          -Foreign
      currency loss
                          
                          
                          (2,579
                          )
                          
                          
                          --Loss
      from discontinued operations
                          
                          $
                          (7,580,839
                          )
                          
                          $
                          (1,015,583
                          )





NOTE 17SUBSEQUENT EVENTS




The
Company has evaluated subsequent events through April 19, 2010, which is the
date they issued their financial statements, and concluded that the following
subsequent events have occurred that require recognition in the Financial
Statements or disclosure in the Notes to the Financial Statements-




On
February 18, 2010 we issued 700,000 shares of Company common stock for
professional services.




NOTE 18 – CHANGE IN METHOD
OF ACCOUNTING FOR CERTAIN CONVERSION AND EXERCISE FEATURES




On
January 1, 2009, the Company adopted EITF 07-5, “Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock” and
changed its accounting, as required, for valuation of convertible notes and
warrants with conversion features and/or exercise features in which either the
conversion or exercise price or the number of warrant shares issuable was
determined by formula with inputs based on the operations of the
Company.  This change required the Company to bifurcate the features
from the host contracts as derivatives under SFAS 133 “Accounting for Derivative
Instruments and Hedging Activities” by recognizing an additional liability for
the fair value assigned to those derivate features, whereas in the prior year
those convertible notes and warrants were accounted for using Emerging Issues
Task Force No. 01-6 “The Meaning of ‘Indexed to a Company's Own
Stock’".   The new method of accounting for convertible notes and
warrants with these features requires that the Company revalue the instruments
at inception and each reporting date and to record the cumulative effect of the
changes in retained earnings into the opening period in which the standard is
adopted.


F-36





We
previously accounted for our convertible notes and warrants with these features
under EITF 01-6 which treated these features as if they were indexed to the
Company’s own stock and thus did not require separate accounting treatment or
bifurcation as derivatives.





Upon
implementing EITF 07-5 for all periods presented the Company recalculated and
replaced the original accounting by recognizing an additional liability for the
value of the bifurcated features.   In addition, because these
instruments are now accounted for as derivatives under SFAS 133, the Company no
longer treats the warrants issued in conjunction with the 12% Secured
Convertible Promissory Notes as Temporary Equity and instead the values assigned
are now included in Note derivative liability.





The
following financial statement line items as of December 31, 2008 were affected
by the change in accounting principle -





CONSOLIDATED
BALANCE SHEET


AS
OF DECEMBER 31, 2008





As Originally
                
                
                
                
                
                Effect ofReported
                
                
                As Adjusted
                
                
                ChangeTotal
      Assets
                
                $
                1,806,008
                
                
                $
                1,806,008
                
                
                $
                -Current
      LiabilitiesShort-term
      borrowings
                
                
                2,400,555
                
                
                
                2,400,555
                
                
                
                -Accounts
      payable
                
                
                1,490,590
                
                
                
                1,490,590
                
                
                
                -Accounts
      payable – related party
                
                
                19,552
                
                
                
                19,552
                
                
                
                -Note
      derivative liability
                
                
                1,523,651
                
                
                
                3,396,935
                
                
                
                1,873,284Other
      current liabilities
                
                
                1,374,534
                
                
                
                1,374,534
                
                
                
                -Deferred
      revenue
                
                
                609,987
                
                
                
                609,987
                
                
                
                -Total
      Current Liabilities
                
                
                7,418,869
                
                
                
                9,292,153
                
                
                
                1,873,284Commitments
      and Contingencies
                
                
                -
                
                
                
                -
                
                
                
                -Temporary
      Equity
                
                
                1,135,980
                
                
                
                -
                
                
                
                (1,135,980
                )Stockholders’
      Deficit:Common
      stock, $0.001 par value, 200,000,000 and 75,000,000 shares authorized as
      of December 31, 2008 and 2007, respectively, and 40,936,143   and
      36,108,067 issued and outstanding at December 31, 2008 and 2007,
      respectively
                
                
                40,936
                
                
                
                40,936
                
                
                
                -Preferred
      stock,$.001 par value of 50,000,000 shares authorized and no shares
      issued
                
                
                -
                
                
                
                -
                
                
                
                -Additional
      paid-in capital
                
                
                11,096,604
                
                
                
                11,096,604
                
                
                
                -Accumulated
      deficit
                
                
                (17,886,381
                )
                
                
                (18,623,685
                )
                
                
                (737,304
                )Total
      Stockholders’ Deficit
                
                
                (6,748,841
                )
                
                
                (7,486,145
                )
                
                
                (737,304
                )Total
      Liabilities and Stockholders' Deficit
                
                $
                1,806,008
                
                
                $
                1,806,008
                
                
                $
                -




F-37





CONSOLIDATED
STATEMENT OF OPERATIONS


AS
OF DECEMBER 31, 2008





As Originally
                                    
                                    
                                    
                                    
                                    
                                    Effect ofReported
                                    
                                    
                                    As Adjusted
                                    
                                    
                                    ChangeLoss
      from operations
                                    
                                    $
                                    (8,780,122
                                    )
                                    
                                    $
                                    (7,764,538
                                    )
                                    $
                                    1,015,584Non-operating
      income (expense)Interest
      expense
                                    
                                    
                                    (3,325,662
                                    )
                                    
                                    
                                    (3,325,662
                                    )
                                    
                                    -Interest
      expense – related party
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    -Expense
      related to derivative
                                    
                                    
                                    (752,748
                                    )
                                    
                                    
                                    (1,490,052
                                    )
                                    
                                    
                                    (737,304
                                    )Interest
      income
                                    
                                    
                                    542
                                    
                                    
                                    
                                    542
                                    
                                    
                                    
                                    -Miscellaneous
      Income
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Gain
      from sale of assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Total
      non-operating expense
                                    
                                    
                                    (4,077,868
                                    )
                                    
                                    
                                    (4,815,172
                                    )
                                    
                                    
                                    (737,304
                                    )Loss
      from continuing operations before income taxes
                                    
                                    
                                    (12,857,990
                                    )
                                    
                                    
                                    (12,579,710
                                    )
                                    
                                    
                                    278,280Loss
      from discontinued operations before income taxes
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (1,015,584
                                    )
                                    
                                    
                                    (1,015,584
                                    )Provision
      for income tax
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Comprehensive
      loss
                                    
                                    
                                    (12,857,990
                                    )
                                    
                                    
                                    (13,595,294
                                    )
                                    
                                    
                                    (737,304
                                    )Net
      (loss) per common share – basic and diluted
                                    
                                    
                                    (0.33
                                    )
                                    
                                    
                                    (0.35
                                    )
                                    
                                    
                                    (0.02
                                    )Net
      (loss) per common share -basic and diluted - continuing
      operations
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (0.32
                                    )
                                    
                                    
                                    (0.32
                                    )Net
      (loss) per common share -basic and diluted - discontinued
      operations
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (0.03
                                    )
                                    
                                    
                                    (0.03
                                    )





As a
result of the accounting change, accumulated deficit as of January 1, 2009,
increased from $17,886,381, as originally reported, to $18,623,685 computed
under EITF 07-5.


F-38