UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-K/A





(Mark One)



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

For the fiscal year ended December 31, 2008

OR



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

For the transition period from              to

Commission File Number 333-128060

DATAMEG CORPORATION

(Exact name of registrant as specified in its charter)





|Delaware                                                       |  | 13-3134389                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)
|2150 S 1300 E, #500, Salt Lake City, UT                        |  | 84106                                  
|(Address of principal executive offices)                       |  | (Zip Code)                             

(866)739-3945

(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.0001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈Nox

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ̈Nox

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 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 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 ̈Smaller reporting companyx

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ̈Nox

The aggregate market value of the registrants common stock held by non-affiliates of the registrant as of June 30, 2008 was approximately $19,693,838(1).

There were 411,696,087 and 411,206,087 shares of the registrants Common Stock, $0.0001 par value per share, issued and outstanding, respectively, as of April 16, 2009. Of the issued shares, 490,000 are being held in treasury for future issuance.



| | (1) | Non-affiliates of the registrant include all shareholders other than directors, executive officers and holders of 10% or more of the registrants Common Stock.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

Documents Incorporated by Reference

Portions of the Companys definitive proxy statement for its annual meeting of shareholders to be held on May 22, 2009, which the Company intends to file within 120 days after the end of the Companys fiscal year ended December 31, 2008 are incorporated by reference into Part III hereof.



TABLE OF CONTENTS





|                            |  |                                                                                                                    |  |   
|--------------------------- |  | ------------------------------------------------------------------------------------------------------------------ |  | --
|Item Number and Description |  | Page                                                                                                              
|                            |  |                                                                                                                   
|Part I                      |  |                                                                                                                    |  |   
|                            |  |                                                                                                                   
|Item 1.                     |  | Description of Business                                                                                            |  | 1 
|                            |  |                                                                                                                   
|Item 1A.                    |  | Risk Factors                                                                                                       |  | 11
|                            |  |                                                                                                                   
|Item 1B.                    |  | Unresolved Staff Comments                                                                                          |  | 15
|                            |  |                                                                                                                   
|Item 2.                     |  | Description of Properties                                                                                          |  | 15
|                            |  |                                                                                                                   
|Item 3.                     |  | Legal Proceedings                                                                                                  |  | 15
|                            |  |                                                                                                                   
|Item 4.                     |  | Submission of Matters to a Vote of Security Holders                                                                |  | 16
|                            |  |                                                                                                                   
|Part II                     |  |                                                                                                                    |  |   
|                            |  |                                                                                                                   
|Item 5.                     |  | Market for Registrants Common Equity and Related Stockholder Matters and Issues of Purchases of Equity Securities |  | 17
|                            |  |                                                                                                                   
|Item 7.                     |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                              |  | 18
|                            |  |                                                                                                                   
|Item 7A.                    |  | Quantitative and Qualitative Disclosures about Market Risk                                                         |  | 23
|                            |  |                                                                                                                   
|Item 8.                     |  | Financial Statements                                                                                               |  | 23
|                            |  |                                                                                                                   
|Item 9.                     |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               |  | 23
|                            |  |                                                                                                                   
|Item 9A(T).                 |  | Controls and Procedures                                                                                            |  | 23
|                            |  |                                                                                                                   
|Item 9B.                    |  | Other Information                                                                                                  |  | 24
|                            |  |                                                                                                                   
|Part III                    |  |                                                                                                                    |  |   
|                            |  |                                                                                                                   
|Item 10.                    |  | Directors, Executive Officers and Corporate Governance.                                                            |  | 25
|                            |  |                                                                                                                   
|Item 11.                    |  | Executive Compensation                                                                                             |  | 25
|                            |  |                                                                                                                   
|Item 12.                    |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     |  | 25
|                            |  |                                                                                                                   
|Item 13.                    |  | Certain Relationships and Related Transactions and Director Independence                                           |  | 25
|                            |  |                                                                                                                   
|Item 14.                    |  | Principal Accounting Fees and Services                                                                             |  | 25
|                            |  |                                                                                                                   
|Item 15.                    |  | Exhibits                                                                                                           |  | 25
|                            | 
|Signatures                  |  | 28                                                                                                                
|                            | 
|Exhibits                    |  |                                                                                                                   

PART I

|Item 1. | Description of Business.
|------- | ------------------------

Overview

Datameg Corporation ("the Company" "Datameg") is a holding company and Delaware corporation that is a successor by merger as of April 27, 2005 to Datameg Corporation, which was a New York corporation incorporated in October 1982 as The Viola Group, Inc. In August 2000 the Company exchanged 90% of its common stock for 100% of the stock of Datameg Corporation, a Virginia corporation that was incorporated in January 1999. The Viola Group then changed its name to Datameg Corporation, remaining a New York corporation. Virginia Datameg was terminated on May 31, 2001 by operation of law.

On April 27, 2005, we entered into an Agreement and Plan of Merger with New York Datameg setting forth the terms of our re-incorporation from New York to Delaware. As part of the re-incorporation, the Company increased its authorized number of shares to 503,000,000, of which 10,000,000 are preferred shares and 493,000,000 are common stock. The Company also changed its par value from $0.01 to $0.0001 per share.

Datameg Corporation has four subsidiaries: American Marketing and Sales, Inc. ("American Marketing and Sales," American Marketing," and "AMS"), a Massachusetts corporation that the Company wholly owns; NetSymphony Corporation ("NetSymphony") and QoVox Corporation ("QoVox"), North Carolina corporations that the Company wholly owns; and CASCommunications, Inc., a Florida corporation, of which the Company owns 40%. The primary business of American Marketing and Sales, Inc., doing business as Innovative Designs, is marketing and selling food service products and caterware. NetSymphony Corporation was incorporated on March 29, 2007 to take advantage of additional, software-driven network assurance products and services, and its planning and staffing are in the formative stage. QoVox was known as North Electric Company, Inc. until July 1, 2005, when North Electric Company filed an Amendment to its Articles of Incorporation with the North Carolina Secretary of State to change its corporate name. Datameg and its subsidiaries individually and collectively have been considered development stage enterprises in prior years. With the acquisition of American Marketing and Sales, Inc., the Company is no longer considered to be in the development stage as defined in SFAS No. 7, "Accounting for Development Stage Enterprises." CASCommunications, Inc. is an inactive company. CASCommunications, Inc. did not generate any revenue in 2008 and is not expected to generate any revenue in 2009.

During the years ended December 31, 2008 and 2007, American Marketing and Sales, Inc. recorded revenue of approximately $11M and $12M, respectively. American Marketing has successfully developed and introduced an extensive line of environment-friendly, injection-molded Green Line food-packaging/caterware products and has received orders or commitments to purchase the new Green Line products from Whole Foods, the U.S. House of Representatives purchasing office in Washington, D.C., and several schools and colleges, including the University of Massachusetts. The new Green Line products consist of 25 items including various sizes of trays, party platters, and serving bowls with lids. These non-toxic products qualify for the Green label inasmuch as they are manufactured from FDA-approved polypropylene and polystyrene resins that contain up to 40 percent recycled plastic content. American Marketing and Sales, Inc. is one of the first manufacturers in the industry to introduce injection-molded caterware and food service products worthy of the prestigious recycled logo mark.

During the first quarter of 2008, American Marketing and Sales introduced additional new products manufactured with 40% recycled resins. The new product line consists of fifteen items of office products including desk top organizers, letter trays, legal letter trays, pencil holders, paper clip and card holders, magazine holders, and telephone and draw organizers. Current and targeted customers include Walmart, Target, BJS, Sams Club, Staples, Office Max, Office Depot, W.B. Mason, Madison Square Garden, Finagle A Bagel, and numerous mail order catalogs.

NetSymphony is focusing on becoming a provider of network assurance products and services. NetSymphonys network assurance products are designed to enable communications network operators and service providers to quickly and automatically determine if their network is meeting its quality and service expectations, while lowering network operating costs. NetSymphony has developed its Maestro System that covers the existing traditional telephone networks, networks that use the same communication technology as the Internet, and converged networks comprised of both of these network types. NetSymphony announced its first product sales in the first quarter of 2008, resulting in $3,520 in revenues for 2008.

QoVox provides consulting service to NetSymphony on a work-for-hire basis. Any revenues generated by QoVox or expenses incurred by NetSymphony as a result of this arrangement will be eliminated in consolidation. During the years ended December 31, 2008 and 2007, QoVox recorded no revenues.

CASCommunications, Inc. had no recorded assets as of December 31, 2008 and had a loss before minority interest of zero for the years ended December 31, 2008 and 2007 due to the lack of activity during those periods. No consolidated assets are collateral for liabilities of CASCommunications, Inc. Datameg has provided $270,000 of the total capital of $388,000 provided to CASCommunications, Inc. as of December 31, 2008.

The consolidated financial statements reflect those of Datameg Corporation, American Marketing and Sales, Inc., Netsymphony Corporation, QoVox Corporation, and CASCommunications, Inc. In accordance with the Financial Accounting Standards Board (FASB) interpretation (FIN) 46R, "Consolidation of Variable Interest Entities, an interpretation of ARB No. 51," the Company continues to consolidate CASCommunications, Inc. as it expects to continue to absorb a majority of CASCommunications, Inc.s losses.

The Company operates under the name of Datameg Corporation and trades under the symbol DTMG on the OTCBB. The Companys active subsidiaries are American Marketing & Sales, Inc., NetSymphony Corporation and QoVox Corporation, each of which the Company wholly owns.

As of April 16, 2009, we had a total of five full time employees, one part time employee, and two part time independent contractors or consultants. Of these, two individuals serve in administrative and senior management capacities at our subsidiaries.

Recent Developments

In March 2009 and subject to shareholder approval, Datameg Corporation announced the sale of American Marketing and Sales, Inc. The material definitive agreement is disclosed in a Form 8-K filed with the Securities and Exchange Commission on April 2, 2009.

On April 14, 2009, Datameg Corporation announced the proposed acquisition of Natural Blue Resources, Inc. The acquisition is not binding unless approved by a majority of the Companys shareholders. A timely Form 8K will be filed concerning the proposed acquisition in April 2009 and a detailed proxy statement and shareholder meeting are planned.

Products in Development

Our products and products in development are:

The Green Line

The primary business of American Marketing and Sales, Inc, doing business as Innovative Designs, is marketing and selling food service products and caterware, American Marketing has successfully developed and introduced an extensive line of environment-friendly, injection-molded Green Line food-packaging/caterware products and has received orders or commitments to purchase the new Green Line of products from Whole Foods, the U.S. House of Representatives purchasing office in Washington, D.C., and several schools and colleges, including the University of Massachusetts. The new Green Line products consist of 25 items including various sizes of trays, party platters, and serving bowls with lids. These non-toxic products qualify for the Green label inasmuch as they are manufactured from FDA-approved polypropylene and polystyrene resins that contain up to 40 percent recycled plastic content. American Marketing is one of the first manufacturers in the industry to introduce injection-molded caterware and food service products worthy of the prestigious recycled logo mark.

During the first quarter of 2008, American Marketing & Sales introduced additional new products manufactured with 40% recycled resins. The new product line consists of fifteen items of office products including desk top organizers, letter trays, legal letter trays, pencil holders, paper clip and card holders, magazine holders, and telephone and draw organizers. Current and targeted customers include Walmart, Target, BJS, Sams Club, Staples, Office Max, Office Depot, W.B. Mason, and numerous mail order catalogs.

Maestro System

NetSymphony has developed the Maestro System that sets new standards for size, simplicity and value. The Maestro system provides integrated management of IP services by assessing, monitoring and troubleshooting IP systems. Maestro leverages measurement points, servers and reporting to allow network operators to manage a customers experience from initial deployment through to problem resolution years later. The M10P probe has the smallest form factor in the industry (1 inch by 1 inch by 4.375 inches). Its zero-configuration startup feature lets users plug it in and begin immediately performing tests and measurements without any complicated configuration required. Maestro provides valuable functions in three major areas: system assessment; assurance and service level agreement monitoring; and fault isolation and troubleshooting.

Description of Primary Industry

American Marketing and Sales, Inc.

Plastics play an indispensable role in a wide variety of markets, ranging from packaging and building/construction to transportation; consumer and institutional products; furniture and furnishings; electronics and more.

Plastic product manufacturing is third among the top manufacturing industry groups in the United States. The plastics industry as a whole, including resin (raw material) suppliers, plastic product manufacturers and machinery and mold makers, contributes 1.1 million jobs and $379 billion in shipments to the U.S. economy.

In 2006, the U.S. Plastics Industry employed 1.1 million people and U.S. plastics shipments totaled $379 billion. From 1980 to 2006, employment in the plastics manufacturing industry grew 1.1 percent per year. Real value added in the plastics manufacturing industry grew 184 percent, from $42.1 billion to $119.4 billion. The real value of shipments by this industry grew 140 percent, from $114.5 billion to $275 billion.

NetSymphony Corporation

Public and private telephone networks are evolving from traditional telephone networks to an Internet-based network infrastructure that makes more efficient use of network resources. Various new technologies are enhancing Internet-based networks to provide new carrier class services while lowering capital and operating costs. These rapidly changing technological developments, coupled with increased bandwidth availability, have enabled the launch of a new generation of network services, such as Internet-based telephony that permits the transfer of voice data over the Internet and secure private networks for the exchange of sensitive data.

Communication service providers, such as telecom operators and cable operators, are challenged to deliver high quality voice services, at the lowest cost, over managed IP infrastructures inter-working with traditional circuit switched networks. To do this effectively, service providers must monitor and measure their voice service offering, proactively detect problems and resolve them quickly and cost effectively, ideally before their customers experience any problem or service degradation. Additionally, when customers do report service problems, operators must be able to effectively identify the cause and fix the problem. NetSymphony provides the systems (products) and services to address these challenges.

The next generation of networks, such as Internet-based telephony, is introducing new capabilities and opportunities for the sale of new products and services. However, for network operators and service providers, the implementation of new network technologies introduces a new set of operational challenges. Many of these challenges arise from the integration of innovative communications systems technologies with existing operational infrastructure. Service providers and enterprise network operators must verify that the new technologies have been installed and are working properly within the framework of their existing network. This verification process and actions to correct detected errors can be very labor intensive and may negatively affect customers by lowering the level of quality below the service level guaranteed to customers. This network assurance market segment is the focus and target of our current and future technologies that will assist our customers in satisfying their obligations to customers with respect to agreed upon levels of service quality.

Integrated and automated network monitoring, testing and automatic detection and location of errors are essential to reliable communications on which enterprise customers depend for mission critical business communications. Our research and development is dedicated towards products and services which will solve the challenging aspects of deploying new technologies into the advanced networks and network services of the future, and monitoring and testing those technologies.

Competition

Competition in the current communications industry is very robust, with many companies from many different backgrounds wrestling for their piece of the business.

Investors can best understand our competitive environment by considering several axes that characterize the operational support system and service assurance market:

Enterprise vs. Carrier

Different companies dominate either the market for services to enterprise or large business customers or the market for services to the public network operators or carriers. We target the carrier market segment, but focus on new technologies and service types which are typically first implemented and proven in the enterprise arena. Therefore, we anticipate that competitive threats will come both from carrier service assurance companies seeking to expand their established business and from enterprise service assurance companies seeking to take their expertise from the enterprise into the carrier domain.

Datacom vs. Telecom

Different companies dominate the telecom, or telephone networking sector of the communications networking business, and the datacom, or data/computer networking sector. Our target market is at the convergence of telecom and datacom in the networking world. Therefore, we expect firms specializing in the data/computer networking sector will seek to expand their market by adding telephone communications functionality to their products in the carrier network infrastructure areas. Similarly, we expect telecom infrastructure service assurance companies will try to expand into the data communications areas.

Test Equipment vs. Network Management Systems

The market for operational support systems is generally divided between the test equipment vendors, who make specialized equipment designed to test particular functions in a piece of networking equipment, and the network management system vendors, who make systems that provide integrative overviews of the network status. We are developing a system that will enable automation of test equipment deployed around a network. With this system in place, a network operator in a single location will have the ability to assess the networks quality of service and to identify and locate errors. This puts us in the path of potential expansion from both the established test equipment vendors seeking to expand their product line into systems level products, and the network management system vendors seeking to broaden their integrated control of the network to include the network test functions previously provided by test equipment vendors.

Our current strategy for competing in this complex environment is to:

- remain focused on the network assurance market by ramping up our sales marketing efforts;
- continue onsite product testing at strategic telecommunication service providers;
- launch product development to maintain a competitive lead; and
- continue to

Intellectual Property

Our intellectual property is in our software products and hardware configurations, which are principally protected by copyright and trade secret law. We are exploring additional protections through potential patents.

Research and Development

For the year ended December 31, 2008, NetSymphony Corporation and QoVox Corporation incurred research and development expense of approximately $94,000 and $159,000, respectively. We anticipate NetSymphony Corporation, rather than QoVox Corporation or American Marketing and Sales, Inc., will incur the majority of the Companys research and development costs during the next twelve months.

Business Overview of CASCommunications, Inc.

CASCommunications, Inc., a Florida corporation in which we hold a 40% equity interest, halted development of its devices related to high speed broadband access in 2004 due to a lack of sufficient capital. CASCommunications is inactive and we do not expect that CASCommunications will generate any revenue in 2008. The Company is currently exploring options.

|Item 1A. | Risk Factors
|-------- | ------------

Forward-Looking and Cautionary Statements

Statements in this Annual Report that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include statements about our future operating results, strategic relationships and product development. You can identify these forward-looking statements because they involve our expectations, beliefs, projections, anticipations or other characterizations of future events or circumstances. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ significantly from results discussed in the forward-looking statements. These factors include, but are not limited to, our history of operating losses, our need for additional financing, a failure of our products to perform as expected, introduction of competing products by other companies, pressures on prices from competitors and/or customers, regulatory obstacles to new product introductions, lack of acceptance of our products and changes in the VoIP and technology industries. Set forth below is a discussion of certain factors that could cause our actual results to differ materially from the results projected in such forward looking statements.

Business Risks

American Marketing and Sales, Inc.

Dependence on Key Employees. Our success will depend upon the successful recruitment and retention of highly skilled and experienced managerial, technical, marketing and financial personnel.

NetSymphony Corporation & QoVox Corporation

Profitability Uncertain. Since our inception, we have been principally engaged in product and business development activities for our network monitoring system. Our technology demonstration programs with certain IP telephony service providers, including Sprint and Time Warner Cable, confirm the QoVox Network Assurance Systems performance and value to the communications industry. We believe that our initial demonstration and evaluation programs with certain carriers support the performance and efficacy of our system and will result in long-term implementation agreements. However, we cannot assure you that commercial viability will be demonstrated for the QoVox Network Assurance Systems, or that other competitive network monitoring solutions will not be chosen as alternatives to our QoVox solutions. Should competitor products displace our products in the market, our prospects for profitability may not be realized.

History of Operating Losses. We have had a history of substantial operating losses since we commenced our current operations in January 1999. From 1999 to December 31, 2007 and prior to the acquisition of American Marketing and Sales, Inc., we generated approximately $135,000 in total revenue and accumulated a net loss of approximately $37 million. These losses were principally the result of our general and administrative costs, our research and development costs and adverse judgments in litigation to which we have been a party. As a result, our liabilities currently greatly exceed our assets. American Marketing and Sales, Inc. generated approximately $11 Million in revenues during 2008, and NetSymphony started generating minimal revenues during the current quarter.

Dependence on Distributor Acceptance. Our NetSymphony sales for the foreseeable future are expected to come from Internet telephony service providers and telecommunications network equipment OEMs. We expect that carriers will integrate our product into services they offer to their aggregated subscriber base. We expect OEMs will incorporate the QoVox Network Assurance Systems into their products once QoVox's Active Monitoring System becomes a network monitoring option. We cannot assure you that we will receive orders from our prospective distribution partners sufficient to provide cash from operations in amounts required to sustain profitable operations. Additionally, we cannot assure you that our products will be adopted at the rate we forecast. Any decrease in the adoption rate could adversely affect our performance.

Sales and Distribution. We now have dedicated sales and marketing personnel. Our larger potential competitors have stronger brand name recognition and significant sales and marketing infrastructures.

Dependence on Key Employees. Our success will depend upon the successful recruitment and retention of highly skilled and experienced managerial, technical, marketing and financial personnel. The competition for such personnel is intense and our competitors will have substantially greater financing and other resources to offer such personnel. Therefore, we cannot assure you that we will successfully recruit and retain necessary personnel.

New Products. NetSymphony andQoVox products and services are in development and are based upon our proprietary core technology. We believe that our future success will depend on additional monitoring algorithms and equipment, and related services, and therefore, on our ability to develop and introduce additional variations on our core technology that provide measurable competitive performance and economic benefit compared to existing and future network monitoring alternatives.

In March 2008, American Marketing & Sales announced the introduction of additional new products manufactured with 40% recycled resins. The new product line consists of fifteen items of office products including desk top organizers, letter trays, legal letter trays, pencil holders, paper clip and card holders, magazine holders, and telephone and draw organizers. Current and targeted customers include Walmart, Target, BJS, Sams Club, Staples, Office Max, Office Depot, W.B. Mason, and numerous mail order catalogs. Sales of our Office Products Green Line commenced in April 2008.

The Office Products Green Line supplements American Marketing & Sales extensive line of environment-friendly, injection-molded Green Line food-packaging/caterware products announced in January 2008. For those products, Innovative Designs has received orders or commitments to purchase the new Green Line of products from Whole Foods, the U.S. House of Representatives purchasing office in Washington, D.C., and several schools and colleges, including the University of Massachusetts.

Dependence on Product Requirements of Customers. Our success prior to acquiring the new companies depended significantly on our ability to develop and introduce, on a timely basis, advanced network assurance products and systems that meet the needs of our customers. If we are unable to design, develop and introduce competitive products on a timely basis, our results of operations for QoVox and NetSymphony will be adversely affected.

Competition. Our potential network access competitors include, but are not limited to, major network equipment manufacturers such as Agilent Technologies, Empirex, MinaCom, Packet Island, and Radcom. Our competitors may have substantially greater research and development, marketing, financial, technological, personnel and managerial resources than we have.

Industry Risks. We depend on the willingness of telecommunications carriers and Internet service providers to purchase our products and services. A slowdown in the telecommunication or networking industries would adversely affect our ability to find partners and prospective customers. Segments of the telecommunications industry have experienced significant business downturns characterized by decreased product demand, price erosion, work slowdowns and layoffs. Our operations may in the future experience substantial fluctuations as a consequence of general economic conditions affecting the timing of orders from major customers and other factors affecting capital spending.

Selling Price/Manufacturing Cost Reduction. We assume that our selling price per unit of product will be reduced over time as production is increased and target unit manufacturing costs are achieved. Selling price reduction and cost reductions are necessary to improve unit price/performance ratios and remain competitive. We cannot assure you that we will successfully achieve target cost goals. Furthermore, our product costs may not be competitive with other commercially available network monitoring technologies.

Management of Growth. Our further development, and our goal to transition into a profitable going concern, will require additional management as well as improved operational and financial systems. In addition, to achieve broader market acceptance, we will need to expand our marketing and sales staff, our employee base and the scope of our operations, all of which will require additional personnel and associated costs. We cannot assure you that we will successfully manage such transition or the expansion of our operations, and our failure to do so could have an adverse effect on our Company. In general, our business plan calls for significant growth over the next five years. Our failure to manage our growth effectively could have a material adverse effect on our business, financial condition and operating results.

Technological Risks

Products Fail to Perform. We have operated our network demonstration systems on live client network conditions. We designed our technology to operate consistent with telephony standards, but we cannot assure you that our products will work uniformly over the entire range of network conditions. While our network monitoring tools are based on well-known and robust microelectronics components, we have limited commercial experience with our products. Accordingly, we lack information on maintenance and returns that might result from less than expected product performance.

Technological Obsolescence. Network monitoring and performance assurance technology is rapidly evolving and highly competitive. We cannot assure you that our research and product development efforts will remain up-to-date given research efforts and technological activities of others, including initiatives and activities of governments, major research facilities and other corporations, nearly all of which enjoy far greater resources than we do.

Intellectual Property Risks. We do not own any patents. We rely primarily on trade secret laws, copyright law, unfair competition law and confidentiality agreements to protect our intellectual property. Our lack of ownership of patents together with the trend toward litigation regarding patent and other intellectual property rights in the telecommunications and networking industries, mean that litigation by third parties is a possibility. While we do not believe that any of our products infringe the valid intellectual property rights of third parties, we may be unaware of intellectual property rights of others that may cover some of our technology, products or services. Any litigation regarding patents or other intellectual property could be costly and time consuming and could divert our management and key personnel from our business operations. The complexity of the technology involved and the uncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement might also require us to enter into costly royalty or license agreements. However, we may be unable to obtain royalty or license agreements on terms acceptable to us, or at all. In addition, third parties may infringe our intellectual property, and we may expend significant resources enforcing our rights or suffer competitive injury.

Regulatory Risks

Regulatory Environment. The regulatory environment for the telecommunications industry has been undergoing liberalization at varying paces and with differing objectives, and in certain markets has been subject to political interference. For the most part, we believe that there will be increasing motivation on the part of regulators to set the regulatory framework for rapid deployment and use of Next Generation Network services. While it is unlikely, we could face regulatory risks.

Financing Risks

Need for Additional Financing; Dilution. Sufficient revenue is needed to cover our operating costs for the next twelve months and start to pay down our debts. We may raise working capital from private and public sources and prospectively from corporate alliances to fund our operations to the point of being self-funding. Should we fail to raise the necessary funding at the levels planned, we may be required to scale back or cease operations but the acquisition has significantly diminished that possibility. We may be required to seek additional financing in the future. We cannot assure you that adequate additional financing, on acceptable terms or at all, will be available when needed, or that future financing would not further dilute stockholders interests. In addition, as a result of our inability to generate sufficient cash flow, we have historically issued stock and options to our executives, employees and consultants in lieu of cash compensation. Additional dilution to our stockholders interests is a possibility that may occur.

|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

Not Applicable.



|Item 2. | Properties
|------- | ----------

American Marketing and Sales, Inc. rents a 3600-square-foot showroom and warehouse at 20 Mohawk Drive, Leominster, MA 01453. The arrangement is month-to-month and cancellable at any time. Monthly payments are $1,200 and include taxes and utilities.

NetSymphony leases approximately 2,600 square feet of space at 7200 Falls of the Neuse Road, Suite 101, Raleigh, North Carolina 27615. The term of the lease is for 26 months beginning December 1, 2007 and expiring January 31, 2010. The monthly rent is approximately $1,950. The property is being used to market and develop NetSymphonys products.

QoVox and Datameg currently are not in need of office space. Our management believes that our insurance coverage for our existing office spaces is adequate.

|Item 3. | Legal Proceedings.
|------- | ------------------

On July 31, 2006, the Company received a letter from counsel for Joshua E. Davidson, giving Mr. Davidsons notice of termination as the Company Comptroller and Acting Chief Financial Officer. The letter further demands $17,500 to satisfy Mr. Davidsons claims against the Company, with the potential for multiple damages for willful deceptive and unfair acts and practices if the matter proceeds to suit. On September 22, 2006, Mr. Davidson filed suit against the Company and the Companys CEO, individually, in Boston municipal court for $14,900 and multiple damages. The Company obtained litigation counsel and on October 16, 2006, defendants filed their answers denying all Mr. Davidsons claims with the Company, filing counter claims against Mr. Davidson, and asking for removal of the action to a court of increased jurisdiction. The matter was settled in October 2008 From Court impounded Company funds, the Company received the return of $2,500 and Davidson kept $12,500.

On February 9, 2007, QoVox filed suit in the United States District Court, East District of North Carolina, Western Division, No. 5:07CV00046BO against Omni Solutions, Inc. and a team of Ohio software consultants and business entities, alleging as to some or all of them, among other things, breach of contract, conspiracy, fraud, conversion, and violation of the North Carolina Trade Secrets Act. Defendants retained counsel, answered the QoVox complaint and filed a counter claim against QoVox and Datameg for amounts defendants claim are due them. The entire action was dismissed in January 2008 after the parties entered into a confidential settlement agreement. Defendants released QoVox and Datameg from all amounts owed them and granted QoVox joint use of the products that were the subject of the litigation.

On February 15, 2007, Datameg received a letter from collection counsel for Merrill Communications LLC for electronic and paper printing work allegedly incurred in 2004 by past outside corporate counsel. Datameg has paid $41,490 and Merrill claims an additional $21,929. Datameg contends Merrill has been paid in full and that Datameg is further entitled to reimbursement of $10,179 for over billing. On or about August 31, 2007, Merrill filed suit in Boston Municipal Court and the Company has filed its answer and counter claims. In September 2008, the Company settled this matter for $10,000 payable over five months.

On March 14, 2007, QoVox was sued in the General District Court of Justice for $7,200 by Joseph L. Turgeon, a past consultant, concerning consulting fees alleged to be owed from March 2004. On March 26, 2009, Mr. Turgeon obtained a writ of execution in the amount of $9,224.

In July 2003, the Company signed a promissory note with a professional for fees and the interest on unpaid fees due that professional through September 30, 2003 in the amount of $247,007. The note was due on August 15, 2003 and was guaranteed personally by the Companys Chairman. The note stated an interest rate of 18% per annum, which had been accrued since the notes inception and totaled $222,442 and $200,166 at September 30, 2008 and December 31, 2007, respectively. No significant payments had been made on the note, and on September 25, 2007, the note holder filed suit, seeking to have a judgment rendered against the Company for all amounts claimed due. On June 23, 2008, the court entered an order for judgment for the full principal and interest on the promissory note. On August 15, 2008, the parties entered into a settlement agreement before entry of a final judgment requiring the Company to pay the plaintiff in full settlement of this case, the sum of $555,000. After making an initial payment of $100,000 under the settlement, the Company defaulted and on February 18, 2009, the court entered final judgment for plaintiff in the amount of $457,927.50. Additional negotiations ensued and the Company and plaintiff entered into a second settlement agreement wherein plaintiff will accept (in escrow) 10 million Datameg common shares as payment of the judgment if the sale of American Marketing and the change of control of Datameg are concluded on or before June 1, 2009. If not, the second settlement is void and the 10 million shares in escrow are to be returned.

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



No matters were submitted to a vote of Datamegs shareholders during the fourth quarter of fiscal year 2008.

PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer of Purchases of Equity Securities.
|------- | ----------------------------------------------------------------------------------------------------------------

Market Information

Our common stock has been listed on the Over-the-Counter Bulletin Board sponsored by the National Association of Securities Dealers, Inc. under the symbol DTMG.OB since September 19, 2000.

The following table sets forth the range of high and low bid prices for the our common stock as reported on the Over the Counter Bulletin Board for each quarter since January 2006 for the periods indicated, as reported by the Over the Counter Bulletin Board for the each period mentioned below. Such information reflects inter dealer prices without retail markup, mark down or commissions and may not represent actual transactions.

|                             |  | Low |      | High
|---------------------------- |  | --- | ---- | ----
|Year Ended December 31, 2006
|Quarter 1                    |  | $   | 0.03 |     
|Quarter 2                    |  | $   | 0.02 |     
|Quarter 3                    |  | $   | 0.01 |     
|Quarter 4                    |  | $   | 0.04 |     
|Year Ended December 31, 2007
|Quarter 1                    |  | $   | 0.04 |     
|Quarter 2                    |  | $   | 0.03 |     
|Quarter 3                    |  | $   | 0.03 |     
|Quarter 4                    |  | $   | 0.03 |     
|Year Ended December 31, 2008
|Quarter 1                    |  | $   | 0.02 |     
|Quarter 2                    |  | $   | 0.02 |     
|Quarter 3                    |  | $   | 0.02 |     
|Quarter 4                    |  | $   | 0.01 |     



Dividend Policy

In the first quarter of 2008, American Marketing and Sales, Inc., pursuant to the acquisition agreement with the Company, paid $373,641 in cash dividends to the selling stockholders to offset taxes incurred by them due to the acquisition. However, it is our present policy not to pay cash dividends and to retain future earnings for use in the operations of the business and to fund future growth. Any payment of cash dividends in the future will depend on the amount of funds legally available, our earnings, financial condition, capital requirements and other factors that the board of directors may think are relevant. We do not contemplate or anticipate paying any dividends in cash on the common stock in the foreseeable future.

Holders of Record of Common Stock

As of April 16, 2009, we had outstanding 409,206,087 shares of our common stock and approximately 552 shareholders of record. An additional 490,000 of previously-issued shares were repurchased by the Company in December 2008 and are currently being held in treasury for resale.

Equity Compensation Plan Information

We have granted options and warrants to employees and consultants to purchase up to 177,185,430 shares of our common stock at prices ranging from $0.01 to $5 per share from inception (January 13, 1999) through December 31, 2008. As of December 31, 2008, options and warrants which would permit the purchase of 10,267,738 shares were exercised and options and warrants for which would permit the purchase of 131,517,692 shares expired or were terminated. The remaining options and warrants to purchase up to 35,400,000 shares expire between January 2009 and June 2013.

The following table shows the aggregate amount of securities related to equity compensation plans as of December 31, 2008:

|Plan Category                                              |  | Number of Securities to be issued upon exercise of outstanding options, warrants and rights |  | Weighted average exercise price of outstanding options, warrants and rights |      | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ---- | -------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plans approved by security holders     |  | None                                                                                        |  |                                                                             | NA   |                                                                                                                                            
|Equity compensation plans not approved by security holders |  | 35,400,000                                                                                  |  | $                                                                           | 0.06 |                                                                                                                                            

Securities that were not registered under the Securities Act but were issued under equity compensation plans:

|Purchased  | Service Provider                      | Non Cash Consideration | Fair Value Share Price (1) | Number of Common Shares
|---------- | ------------------------------------- | ---------------------- | -------------------------- | -----------------------
|           |                                       |                        |                            |                        
|3/14/2008  | Paul Vuksich                          | $ 41,625               | 0.040                      | 1,035,684              
|3/26/2008  | Terry Clarke                          | 2,000                  | 0.040                      | 50,000                 
|3/26/2008  | Lynn Kettleson                        | 1,500                  | 0.040                      | 37,500                 
|4/15/2008  | Lynel J. Tocci                        | 26,500                 | 0.0265                     | 1,000,000              
|4/15/2008  | Leanne J. Whitney                     | 26,500                 | 0.0265                     | 1,000,000              
|4/15/2008  | Linnea J. Clary                       | 26,500                 | 0.0265                     | 1,000,000              
|5/27/2008  | Shirley&Adams,PLLC                    | 28,000                 | 0.028                      | 1,000,000              
|11/13/2008 | Equititrend Advisors, LLC            | 49,000                 | 0.0098                     | 5,000,000              
|11/13/2008 | Shareholder Intelligence Services LLC | 4,900                  | 0.0098                     | 500,000                
|11/13/2008 | Paul Vuksich                          | 14,146                 | 0.0135                     | 1,047,841              
|11/13/2008 | Cornelius Kane                        | 980                    | 0.0098                     | 100,000                
|11/13/2008 | Jack Geckler                          | 4,900                  | 0.0098                     | 500,000                
|11/13/2008 | Kim McIntosh                          | 2,450                  | 0.0098                     | 250,000                
|           |                                       | $ 229,001              |                            | 12,521,025             

(1) The Fair Value Price may not equate with share closing price on the date of share issuance.

Recent Sales of Unregistered Securities:

|Purchased  | Investor             | Consideration | Share Price | Number of Common Shares
|---------- | -------------------- | ------------- | ----------- | -----------------------
|3/22/2008  | John Boniface        | $ 50,000      | 0.025       | 2,000,000              
|4/13/2008  | Esther H. Levens     | 15,000        | 0.025       | 600,000                
|8/19/2008  | Paul Mikulas         | 3,125         | 0.025       | 125,000                
|10/1/2008  | D.A.S.               | 5,000         | 0.010       | 500,000                
|10/3/2008  | Francis Seymour      | 10,000        | 0.010       | 1,000,000              
|10/13/2008 | John Boniface        | 10,000        | 0.010       | 1,000,000              
|12/1/2008  | Christiane Hermstedt | 10,000        | 0.010       | 1,000,000              
|           |                      | $ 103,125     |             | 6,225,000              
|           |                      |               |             |                        
|           |                      |               |             |                        
|3/18/2009  | John Boniface        | $50,000       | 0.025       | 2,000,000              



|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Results of Operations

Overview

The sections of "Managements Discussion and Analysis of Financial Condition and Results of Operations" contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which involve risks and uncertainties. Our actual results may differ significantly from results discussed in the forward-looking statements due to a number of important factors, including, but not limited to our history of operating losses, our need for additional financing, a failure of our products to perform as expected, introduction of competing products by other companies, pressures on prices from competitors and/or customers, regulatory obstacles to new product introductions, lack of acceptance of our products and changes in the VoIP and technology industries.

PLAN OF OPERATION

THE GREEN LINE

American Marketing and Sales, Inc., located in Leominster, Massachusetts, has successfully developed and introduced an extensive line of environment-friendly, injection-molded Green Line food-packaging/caterware products and has received orders or commitments to purchase the new Green Line of products from U.S. Foodservice, Madison Square Garden, Whole Foods, Le Pain Quotidien restaurants, Finagle A Bagel, the U.S. House of Representatives purchasing office in Washington, D.C., and several schools and colleges including the University of Massachusetts. The new Green Line products consist of 25 items including various sizes of trays, party platters, and serving bowls with lids. These non-toxic products qualify for the Green label inasmuch as they are manufactured from FDA-approved polypropylene and polystyrene resins that contain up to 40 percent recycled plastic content. American Marketing and Sales, Inc. is one of the first manufacturers in the industry to introduce injection-molded caterware and food service products worthy of the prestigious recycled logo mark. On March 11, 2008, American Marketing and Sales, Inc. entered into a binding term sheet to acquire one-third of the outstanding shares and 50% of the voting rights in one of American Marketing and Sales, Inc.s primary manufacturers, JAM Plastics, also located in Leominster. As of April 16, 2009, the agreement had not yet closed and no stock had been exchanged.

During the first quarter of 2008, American Marketing and Sales introduced additional new products manufactured with 40% recycled resins. The new product line consists of fifteen items of office products including desk top organizers, letter trays, legal letter trays, pencil holders, paper clip and card holders, magazine holders, and telephone and draw organizers. Current and targeted customers include Walmart, Target, BJS, Sams Club, Staples, Office Max, Office Depot, W.B. Mason, and numerous mail order catalogs.

Green Line food caterware and office products are marketed through a dedicated web site entitled Green Planet Plastics (greenplanetplastic.com). Green Line products are made with recycled material as part of American Marketings efforts to take earth-friendly steps toward product awareness.

SERVICE ASSURANCE SYSTEMS PRODUCTS AND SERVICES FOR NETWORK OPERATORS IN THE TELECOMMUNICATIONS INDUSTRY

Datameg is a holding company, but through its subsidiary, NetSymphony Corporation, is a technology company focused on providing service assurance systems products and services for network operators in the telecommunications industry. Our target customers are telecom operators and cable operators worldwide. We focus specifically on voice services over traditional circuit switched and managed IP networks.

Through our wholly owned subsidiary, NetSymphony Corporation subcontracting with QoVox Corporation and 3rd party consultants, we design, develop and sell an active voice quality test system, capable of monitoring and providing analytical/statistical data that characterizes the connectivity and measurement of voice quality across communications networks. QoVox will continue its focus on PSTN testing interfaces and NetSymphony will be developing Internet Protocol (IP) based testing interfaces that are software based. We are working on tools and techniques for network wide fault identification, isolation and troubleshooting.

Communication service providers, such as telecom operators and cable operators, are challenged to deliver high quality voice services, at the lowest cost, over managed IP infrastructures and inter-working with traditional circuit switched networks. To do this effectively, service providers must monitor and measure their voice service offering, proactively detect problems and resolve them quickly and cost effectively, ideally before their customers experience any problem or service degradation. Additionally, if customers do report service problems, operators must be able to effectively identify the cause and fix the problem. QoVox provides the systems (products) and services to address these challenges.

VoIP Market

VoIP is one of the fastest growing segments in the telecommunications sector. Yankee Group and IDC, leading market research firms, estimate the growth of VoIP subscribers. Yankee Group estimated VoIP subscribers would grow from one million at the end of 2004 to 18 million by 2008. IDC reported the number of VoIP subscribers in the U.S. will jump from three million in 2005 to 27 million in 2009.

VoIP service providers include local and long distance telephone companies, such as, AT&T, Verizon, Qwest, Sprint, MCI and others; cable multi service operators (MSO's) such as Cablevision, Comcast, Cox, Rogers, Time Warner Cable and others; and emerging service providers, such as Vonage and others.

In November 2004, Frost & Sullivan reported the VoIP Monitoring market in 2004 was $50 million. By 2008, the VoIP Monitoring market is forecasted to reach $297 million, representing a 56% compounded annual growth rate from 2004 through 2008.

Business Challenge Driving Demand for New Tools and Services

Enterprise and residential customers expect and demand that their voice services are high quality and are offered at the lowest possible cost. To meet these expectations, communication service providers must save significant capital costs and operating expenses through deploying and operating next generation networks. These next generation networks utilize packet switching technology that is different from the traditional circuit switched networks. Some service operators expect to save between 40% to 50% of their capital and operating expenditures.

Service providers are deploying and operating these next generation networks today, often inter-working with traditional circuit switched networks. Service providers need tools and services, like those QoVox offers, to report statistically and analytically the performance of their service and to isolate, diagnose and fix problems. Many service providers who have limited experience in managing these emerging networking technologies are focused today on deployment and need help to report on the service performance and to identify and troubleshoot problems. To deploy and operate these networks and services, service providers must buy tools and develop new expertise to deploy, operate and manage these new networks and services. This is the business opportunity that NetSymphony targets.

We believe the NetSymphony systems and services enable service providers to proactively depict their voice services and to detect and pinpoint network problems. These problems may be repaired effectively; thus, minimizing the number and extent of incidences of customers experiencing loss of service or poor voice quality.

Business Objectives

We strive to be among the global leaders in developing and selling systems and services for service assurance of next generation networks and services.

Our goal is to be the leading supplier of active voice quality test systems within three years. Thus, we have an immediate business focus on expanding our relationships with our customer base through value-added services while developing a new platform to increase revenue through systems sales. There are three important elements to achieve this:

- Develop a new platform with extensive correlation and analytic capabilities to detect and isolate problems in our customers networks,
- Invest heavily in Internet Protocol (IP) measurement technology, and
- Convert our current trials into service engagements.

We plan to leverage our existing Time-division multiplexing (TDM) and Analog solutions and combine them with new IP based solutions to provide the market with the most complete service assurance platform for converged / next-generation networks. TDM is a method of putting multiple data streams in a single signal by separating the signal into many segments, each having a very short duration. While investing heavily in our new platform, we will continue to grow customer relationships and accelerate revenue generation through offering professional services. Services overcome the obstacles of lengthy sales cycles while more rapidly solving customer problems.

Current Situation

NetSymphonys Maestro System, consisting of hardware and software, actively makes calls between various points across communication networks and correlates and reports the results of these call campaigns on a centralized server. We can operate the system on behalf of our customers, or our customer can operate the system.

Although we commenced sales of the Maestro Systemin the first quarter of 2008, only $3,520 of revenues were recognized during 2008.

NetSymphony and QoVox have their offices in Raleigh, North Carolina.

Business Strategy and Direction

NetSymphony intends to:

- Develop and sell systems products and services;
- Continue to target telecom operators and cable operators;
- Develop its business first in the U.S. and Canada. Africa, Mid-East and European markets will also be addressed in 2009.
- Continue providing solutions for the challenges related to deploying and operating voice services, especially in the areas of quality and security. NetSymphony plans to extend its capability into fault isolation and troubleshooting. Additionally, NetSymphony plans to make contributions for other emerging technologies, such as video over IP.

NetSymphony will pursue the following strategy to achieve our business objectives:

- Develop the industrys premier service assurance system that enables customers to assess, monitor and troubleshoot IP based services;
- Develop and offer the servicesto characterize network and service health and to isolate and diagnose performance and security problems;
- Create a consultative sales and supportorganization in both our direct and channel sales initiatives; and
- Partner with selected system integratorsto facilitate the easy installation and customization of NetSymphony systems into the customers operating environment and workflow. In addition, system integrators are expected to be a source of leads, referrals and support for our sales efforts.

Product Development

NetSymphony has products and services that help service providers deploy and manage voice services. To date, the majority of product development activity has been centered on analog and TDM probe hardware. This investment was necessary to establish the company in the test and measurement market.

NetSymphony will add the IP networking technology to the Datameg solution portfolio and become the premier service assurance provider. To achieve this goal, additional investment will be in the following areas:

- Server Software: In complex networks the most pressing need is to be able to correlate and analyze measurement information along with network elements statistics to pinpoint where problems are occurring. We will be developing this capability in 2009.
- IP Measurement Technology: NetSymphony now has as employees IP measurement experts that have developed products that should be very successful commercially. This team will introduce IP measurement solutions in 2009 that will be the most advanced in the industry.
- Leverage Existing Products: The value of the current NetSymphony system will be integrated into the new server platform and operate in conjunction with the new IP probes and software agents. This will greatly enhance the value of existing technology.

Our products are deployed throughout the service providers network. Our products check that calls can be connected properly across these networks and measure the voice quality between various points in the network.

Services Offering

At present, NetSymphony operates a Network Operations Center in Raleigh, NC, for a small number of network operators.

NetSymphony plans to aggressively convert our existing sales opportunities to services offerings in 2009. Customers are still wary of large capital budget outlays causing an extended sales cycle that can extend over 18 months. Our customers have immediate problems and the current NetSymphony solutions can solve many of their issues. Therefore, we are working with our trial partners to move to a services engagement that is based on their expense budget and can be done quickly. We will offer Assessment Testing, Service Assurance Monitoring and Consulting as professional services.

Marketing and Sales

NetSymphony plans to develop a joint global sales and support channel, comprised of:

- Direct sales representatives, sales engineers and support specialists;
- High end distributors that offer system integration in this market; and
- A small number of operational support system vendors, equipment manufacturers and system integrators who will provide referrals or resell the NetSymphony products and services.

In the next three years, NetSymphony expects to fully develop sales and support channels in:

- The U.S. and Canada, covering Tier 1 and Tier 2 wireline and mobile telecom operators and the Top 25 cable operators;
- Western and eastern Europe; and
- Japan, China, Korea and India.

NetSymphony plans to actively participate in international and regional industry forums and standardization bodies to build and earn a reputation as an innovative industry leader.

NetSymphony plans to organize and host regional Industry Leadership Forums, bringing together industry leaders

Competition

There are a number of competitors in the VoIP Monitoring business. These companies can be segmented into Enterprise and Service Provider markets.

Enterprise focused competitors feature lower cost solutions that are not designed to scale to requirements of service providers. Vendors such as Attachmate (formerly NetIQ),Viola Networks and Packet Island fall into the Enterprise segment.

The Service Provider segment is comprised of traditional Service Assurance vendors such as Spirent, JDSU and Agilent. These companies come from a physical layer test background and are attempting to gain market share in the IP services market that involves significant investment.

There are 3 key areas of competitive differentiation for QoVox:

1. Software-Based Approach. Competitors are very hardware-based in their solutions, which limits the flexibility of instrumenting networks for service assurance and causes their price points to be very high. NetSymphonys solutions will be software-based to overcome these challenges.
2. Active & Passive Analysis. Most competitors rely on providing measurements through active testing (generating real calls on a network) or passive monitoring (analyzing customers calls as they occur). Customers realize there are merits to both methods and NetSymphony will provide passive analysis in addition to its existing active capabilities.
3. Media & Signaling. Competitors such as Agilent rely on Signaling analysis to verify user status in VoIP. Other vendors such as JDSU and Sprint focus on analyzing the media streams (actual calls) to verify the quality. In reality, to measure the user experience and to isolate problems when they occur both media and signaling need to be measured. NetSymphony is currently adding signaling capabilities to its media stream technology.

CasCommunications

We own 40% of CasCommunications, an inactive development stage entity. We do not expect CasCommunications to generate any revenue in 2009. The Company is exploring options.

Liquidity and Capital Resources

Due to our recent and future acquisitions, current cash on hand and projected cash on hand is now adequate to execute our plan of operation based on loans from the companies being acquired. Since and after the closings, we expect to no longer continue to seek additional financing through the offering and sale of our securities in order to satisfy our immediate and short term cash needs. Given the losses incurred to date and the lack of substantial revenue generated, we have little or no access to conventional debt markets. Funding to support both short and midterm requirements for product development and launch may be done through additional sale of shares and potentially, to a lesser extent, from working capital that might be generated from customer revenue in the future. Until the Companys products generate significant revenue from a customer, future cash flows cannot be meaningfully projected.

There can be no assurance that we will be able to raise additional capital on acceptable terms or at all. If we are unable to raise additional capital, we would need to curtail or reduce some or all of our operations, and some or all of NetSymphonys or QoVox's operations.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and equity 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. These estimates have a material impact on our financial statements.

Revenue Recognition

American Marketing & Sales, Inc.

American Marketing and Sales, Inc. recognizes revenue from product sales in accordance with Staff Accounting Bulletin No. 104, which requires recognition when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and payment is reasonably assured. The Company has determined that these criteria have been met upon shipment, and recognizes revenue at that point.

Pursuant to SFAS No. 5, "Accounting for Contingencies," American Marketing and Sales, Inc. has examined collection history, financial conditions of clients, and general economic conditions and determined that it is not necessary to set an allowance for doubtful accounts, which have historically not been significant.

NetSymphony Corporation & QoVox Corporation

NetSymphony Corporation and QoVox Corporation derive revenue from three primary sources: (1) system hardware component sales revenue, (2) software license revenue and (3) services and maintenance and right to use revenue, which include support, maintenance, right to use fees and consulting. Revenue on system hardware component sales is recognized upon delivery to, and acceptance by, the customer. Software license revenue recognition is substantially governed by the provisions of Statement of Position No. 97-2, "Software Revenue Recognition," (SOP 97-2) issued by the American Institute of Certified Public Accountants. The Company exercises judgment and uses estimates in connection with the determination of the amount of software license and services revenue to be recognized in each accounting period. For software license arrangements that do not require significant modification or customization of the underlying software, the Company recognizes revenue when: (1) it enters into a legally binding arrangement with a customer for the license of software; (2) it delivers the products or perform the services; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties (4) collection is probable and (5) vendor specific objective evidence (VSOE) of fair value exists to allocate the total fee among all delivered and undelivered elements in the arrangement.

Multiple Element Arrangements

The Company typically enters into arrangements with customers that include perpetual software licenses, system hardware, maintenance and right to use fees. Software licenses are sold on a per copy basis. Per copy licenses give customers the right to use a single copy of licensed software for exclusive use on the Companys system hardware. Assuming all other revenue recognition criteria are met, license revenue is recognized upon delivery using the residual method in accordance with SOP No. 98-9, "Modification of SOP 97-2: Software Revenue Recognition." Under the residual method, the Company allocates and defers revenue for the undelivered elements, based on VSOE of fair value, and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of each undelivered element in multiple element arrangements is based on the price charged when the same element is sold separately. If sufficient evidence of fair value cannot be determined for any undelivered item, all revenue from the arrangement is deferred until VSOE of fair value can be established or until all elements of the arrangement have been delivered. If the only undelivered element is maintenance and technical support for which the Company cannot establish VSOE, the Company will recognize the entire arrangement fees ratably over the maintenance and support term.

System hardware is hardware that is installed at a customer site for the purpose of utilizing the licensed software and as such, does not qualify as a separately deliverable element. The timing of revenue recognition from the sale of system hardware is therefore dependent upon the recognition of revenue for the related software licenses.

Maintenance and right to use fees include updates (unspecified product upgrades and enhancements) on a when and if available basis, telephone support and bug fixes or patches and maintenance of the systems hardware, which would include repairs or replacement as necessary. VSOE of fair value for maintenance and right to use fees is based upon stated annual renewal rates. Maintenance and right to use fees revenue is recognized ratably over the maintenance and right to use term.

Revenue Recognition Criteria

The Company defines revenue recognition criteria as follows:

- Persuasive Evidence of an Arrangement Exists. It is the Companys customary practice to have a purchase order prior to recognizing revenue on an arrangement.
- Delivery has Occurred. The Companys software and systems hardware are physically delivered and installed at its customers site. The Company considers delivery complete when the software and system hardware products have been installed and the testing phase completed. The Company defers all the revenue until the testing phase has been completed and the Company receives customer acceptance.
- The Vendors Fee is Fixed or Determinable. The Companys invoices or service agreements identify the price for services to be rendered, and customary payment terms are generally within 30 days after the invoice date.
- Collection is Reasonably Assured. Due to a lack of customer history upon which a judgment could be made as to the collectability of a particular receivable, revenue is currently recognized upon receipt of payment assuming all other conditions of the sale have been met.

Cost of Revenue

Cost of revenue includes costs related to user license, systems hardware and maintenance and right to use fees revenue. Cost of user license revenue includes material, packaging, shipping and other production costs and third party royalties. Cost of systems hardware includes the cost of goods sold and installation costs. Cost of maintenance and right to use fees and consulting fees include related personnel costs, and hardware repair costs. Third party consultant fees are also included in cost of services.

Inventory

The Companys inventory is stated at the lower of cost or market value. Cost is determined using the first in, first out method. Unusual losses resulting from lower of cost or market adjustments or losses on firm purchase commitments, if any, are disclosed, and if material, separately stated from cost of goods sold in the statement of operations.

Commitments and Contingencies

Commitments and contingencies are evaluated on an individual basis to determine the impact on current and future liabilities and assets. We make a determination as to whether such a liability or loss is reasonably possible, and we either estimate the amount of possible loss or liability or range of loss or liability. In rare cases, we are not able to determine the amount of such loss or liability or even a range of amounts in a way that would not be misleading. We may be unable to calculate a liability or loss if substantiated information is unavailable or the amount of the loss or liability depends significantly on future events.

In addition to evaluating estimates relating to the items discussed above, we also consider other estimates, including but not limited to, those related to software development costs, goodwill and identifiable intangible assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions.

Software Development Costs

Statement of Financial Accounting Standards (SFAS) No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed," requires capitalization of certain software development costs subsequent to the establishment of technological feasibility and readiness of general release. In 2004, certain costs were incurred subsequent to the establishment of technological feasibility and prior to the readiness of general release. These expenses were immaterial in nature and in total and therefore not capitalized. We also license from a third party the use of certain software that we utilize in our products. These computer software license fees are expensed as incurred.

Fair Value of Financial Instruments

The carrying value of cash, notes receivable, accounts payable and accrued expenses and notes payable approximate fair value because of the relatively short maturity of these instruments.

Stock Based Compensation

The Company follows guidance provided in SFAS No. 123(R), "Accounting for Stock Based Compensation," which requires companies to recognize expense for stock based awards issued to employees or outside consultants based on their estimated fair value on the grant date. We have elected to use the Black-Scholes Pricing Model to value these awards.

Income Taxes

The Company, a "C" corporation, accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are determined based on 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. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The principal differences are net operating losses, startup costs and the use of accelerated depreciation methods to calculate depreciation expense for income tax purposes.

Consolidation of Variable Interest Entities

In January 2003 and revised December 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities." This interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," requires consolidation by business enterprises of variable interest entities, as defined, when certain conditions are met. Pursuant to FIN No. 46, the Company continues to consolidate CASCommunications, Inc.





For the year ended December 31 2008, the Company incurred a net loss from operations of $1,214,611 compared with a loss from operation of $1,609,964 for the year ended December 31, 2007. We recognized an overall net income of $794,792 for 2008, which is primarily due to significant settlements and debt write-offs, as compared to an overall net loss of $1,632,658 for 2007. Cash on hand was $398,978 as of December 31, 2008 compared with $49,086 as of December 31, 2007. Our gross revenues increased significantly from $817,477 in 2007 to $10,916,314, which is attributable to continued and growing profitability of American Marketing and Sales, which continues to expand its customer base as to its Green Line caterware and office products. On the expense side, the Company has diligently pruned its expenses and settled many outstanding liabilities. NetSymphony and QoVox continue to struggle with product development, particularly in the current financial climate. Many potential customers have delayed trials of the NetSymphonys Maestro VoIP testing system and it is not expected that serious trials by any potential customer will begin earlier than the third quarter of 2009.





|Item 8. | Financial Statements.
|------- | ---------------------

INDEX

Datameg Corporation

Consolidated Financial Statements

Years Ended December 31, 2008 and 2007





|CONTENTS                                                   |  |   | 
|---------------------------------------------------------- |  | - | 
|Consolidated Balance Sheets                                |  | 2 | 
|Consolidated Statements of Operations                      |  | 3 | 
|Consolidated Statement of Changes in Stockholders Deficit |  | 4 | 
|Consolidated Statements of Cash Flows                      |  | 6 | 
|Notes to Consolidated Financial Statements                 |  | 8 | 
|                                                           |  |   | 



Child, Van Wagoner & Bradshaw, PLLC

|5296 South Commerce Drive, Suite 300 Salt Lake City, Utah 84107-5370 Telephone (801) 281-4700 Facsimile (801) 281-4701 | 1284 West Flint Meadow Drive, Suite D Kaysville, Utah 84037-9590 Telephone (801) 927-1337 Facsimile (801) 917-1344
|---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To The Board of Directors and Stockholders

Datameg Corporation



We have audited the accompanying consolidated balance sheets of Datameg (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in stockholders deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 audits 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 consolidated 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 audits provide 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 Datameg Corporation as of December 31, 2008 and 2007, 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 L to the consolidated financial statements, the Company has incurred losses since inception, and has generated minimal revenues from its planned principal operations. This raises substantial doubt about the Companys ability to meet its obligations and to continue as a going concern. Managements plans in regard to this matter are described in Note L. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Child, Van Wagoner & Bradshaw, PLLC



Child, Van Wagoner & Bradshaw, PLLC

Salt Lake City, Utah

April 13, 2009



|DATAMEG CORPORATION AND SUBSIDIARIES       
|-------------------------------------------
|Consolidated Balance Sheets                
|                                           
|                                           
|                                           
|ASSETS                                     
|CURRENT ASSETS                             
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|PROPERTY AND EQUIPMENT  NET (Note J)      
|TOTAL ASSETS                               
|                                           
|LIABILITIES AND STOCKHOLDERS' DEFICIT      
|CURRENT LIABILITIES                        
|                                           
|                                           
|                                           
|                                           
|                                           
|NOTES PAYABLE  LONG-TERM PORTION (Note E) 
|TOTAL LIABILITIES                          
|                                           
|MINORITY INTEREST                          
|                                           
|STOCKHOLDERS' DEFICIT (Note I)             
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

See accompanying notes to the financial statements.

|DATAMEG CORPORATION                  
|-------------------------------------
|Consolidated Statements of Operations
|                                     
|                                     
|                                     
|                                     
|NET SALES                            
|COST OF SALES                        
|INVENTORY WRITE-OFF                  
|GROSS MARGIN                         
|                                     
|OPERATING EXPENSES                   
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|LOSS FROM OPERATIONS                 
|                                     
|OTHER INCOME (EXPENSES)              
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|INCOME (LOSS) BEFORE INCOME          
|TAXES AND MINORITY INTEREST          
|                                     
|PROVISION FOR INCOME TAXES           
|                                     
|MINORITY INTEREST IN                 
|SUBSIDIARIES LOSSES                  
|                                     
|NET INCOME (LOSS)                    
|BASIC AND DILUTED:                   
|                                     
|                                     
|                                     

See accompanying notes to the financial statements.

|DATAMEG CORPORATION                                       
|----------------------------------------------------------
|Consolidated Statement of Changes in Stockholders Deficit
|Years Ended December 31, 2008 and 2007                    
|                                                          
|                                                          
|                                                          
|Balance, December 31, 2006                                
|                                                          
|Stock issued Jan. 07 for cash received Dec. 06            
|                                                          
|Stock issued for cash                                     
|Stock issued for cash                                     
|Stock issued for cash                                     
|                                                          
|Stock issued for expense reimbursement                    
|                                                          
|Stock issued for services                                 
|Stock issued for services                                 
|Stock issued for services                                 
|Stock issued for services                                 
|                                                          
|Stock issued for exercise of warrants                     
|                                                          
|Stock option vesting                                      
|                                                          
|Stock issued for acquisition of AMS                       
|                                                          
|Cancellation of stock                                     
|                                                          
|Write-down of stock subscriptions receivable              
|                                                          
|Net loss                                                  
|                                                          
|Balance, December 31, 2007                                
|(continued)                                               

|DATAMEG CORPORATION                                                   
|----------------------------------------------------------------------
|Consolidated Statement of Changes in Stockholders Deficit (continued)
|Years Ended December 31, 2008 and 2007                                
|                                                                      
|                                                                      
|                                                                      
|Subscr. Receivable                                                    
|                                                                      
|Stock Issued for Cash                                                 
|23-Mar-08                                                             
|15-Apr-08                                                             
|19-Aug-08                                                             
|1-Oct-08                                                              
|3-Oct-08                                                              
|13-Oct-08                                                             
|1-Dec-08                                                              
|                                                                      
|Stock Issued for Current Year Services                                
|26-Mar-08                                                             
|15-Apr-08                                                             
|13-Nov-08                                                             
|                                                                      
|Stock Issued for Prior Year Services (Reduction of Accounts Payable)  
|19-Feb-08                                                             
|27-May-08                                                             
|13-Nov-08                                                             
|13-Nov-08                                                             





|DATAMEG CORPORATION                                                   
|----------------------------------------------------------------------
|Consolidated Statement of Changes in Stockholders Deficit (continued)
|Years Ended December 31, 2008 and 2007                                
|                                                                      
|                                                                      
|                                                                      
|Other Transactions                                                    
|Stock issued as prepayment for future services                        
|Stock option vesting expense                                          
|Stock cancellation                                                    
|Purchase of treasury stock                                            
|Declaration and payment of cash dividend                              
|Write-down of subscription receivable                                 
|Forgiveness of related party debt                                     
|Net income                                                            
|                                                                      
|Balance December 31, 2008                                             





|DATAMEG CORPORATION                                   
|------------------------------------------------------
|Consolidated Statements of Cash Flows                 
|                                                      
|                                                      
|                                                      
|                                                      
|CASH FLOWS FROM OPERATING ACTIVITIES:                 
|Net income (loss)                                     
|                                                      
|Adjustments to reconcile net income (loss) to net cash
|provided by (used in) operating activities:           
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
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|                                                      
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|                                                      
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|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|CASH FLOWS FROM INVESTING ACTIVITIES:                 
|                                                      
|                                                      
|                                                      
|Net Cash Provided by (Used in) Investing Activities   
|                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES:                 
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|Net Cash Provided by (Used in) Financing Activities   
|                                                      
|NET INCREASE (DECREASE) IN CASH                       
|CASH, BEGINNING OF PERIOD                             
|                                                      
|CASH, END OF PERIOD                                   

(continued)



|DATAMEG CORPORATION                                                    
|-----------------------------------------------------------------------
|Consolidated Statements of Cash Flows (continued)                      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOWS                                  
|Cash paid for interest                                                 
|Cash paid for income taxes                                             
|                                                                       
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|Stock issued for satisfaction of debt                                  
|Stock issued for fixed assets                                          
|Conversion of accounts payable to notes payable                        
|Conversion of notes payable and accrued interest to judgments payable  
|Cancellation of 1,000,000 shares of stock, $.0001 par value            
|Stock issued as a reduction of "Stock to be Issued"                    
|Note payable issued for purchase of subsidiary                         
|Stock issued for purchase of subsidiary                                
|Stock issued as prepayment for future services                         
|Forgiveness of related party debt                                      
|Write down of common stock subscription receivable                     
|Stock issued for subscription receivable                               

See accompanying notes to the financial statements.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

A. BASIS OF PRESENTATION AND ORGANIZATION

Datameg Corporation has four subsidiaries: American Marketing and Sales, Inc., a Massachusetts corporation that the Company wholly owns; NetSymphony Corporation and QoVox Corporation, North Carolina corporations that the Company wholly owns; and CASCommunications, Inc., a Florida corporation, of which the Company owns 40%. The primary business of American Marketing and Sales, Inc. (doing business as Innovative Designs) is marketing and selling food service products and caterware. NetSymphony Corporation was incorporated on March 29, 2007 to take advantage of software-driven network assurance products and services, and its planning and staffing are in the formative stage. QoVox was known as North Electric Company, Inc. until July 1, 2005, when North Electric Company filed an Amendment to its Articles of Incorporation with the North Carolina Secretary of State to change its corporate name. Datameg and its subsidiaries individually and collectively have been considered development stage enterprises in prior years. With the acquisition of American Marketing and Sales, Inc., the Company is no longer considered to be in the development stage as defined in SFAS No. 7, "Accounting for Development Stage Enterprises." CASCommunications, Inc. is an inactive company. CASCommunications, Inc. did not generate any revenue in 2008 and is not expected to generate any revenue in 2009.

NetSymphony focuses on becoming a provider of network assurance products and services. NetSymphonys network assurance products are designed to enable communications network operators and service providers to quickly and automatically determine if their network is meeting its quality and service expectations, while lowering network operating costs. NetSymphony has developed their Maestro System that covers the existing traditional telephone networks, networks that use the same communication technology as the Internet, and converged networks comprised of both of these network types. NetSymphony announced its first product sales in the first quarter of 2008, resulting in $3,520 gross revenues during 2008.

QoVox provides consulting service to NetSymphony on a work for hire basis. Any revenues generated by QoVox or expenses incurred by NetSymphony as a result of this arrangement will be eliminated in consolidation. On August 1, 2008, QoVox licensed the use of certain residual software it developed to NetSymphony. During the years ended December 31, 2008 and 2007, QoVox did not generate any revenues.

CASCommunications had no recorded assets as of December 31, 2008 or 2007, and had a loss before minority interest of zero for the the years then ended due to the lack of activity. No consolidated assets are collateral for liabilities of CASCommunications. Datameg has provided $270,000 of the total capital of $388,000 provided to CASCommunications as of December 31, 2008.

These consolidated financial statements reflect those of Datameg Corporation, American Marketing & Sales, Inc., NetSymphony Corporation, QoVox Corporation, and CASCommunications, Inc. In accordance with the Financial Accounting Standards Board (FASB) interpretation (FIN) 46R, "Consolidation of Variable Interest Entities, an interpretation of ARB No. 51," the Company continues to consolidate CASCommunications, Inc. as it expects to continue to absorb a majority of CASCommunications, Inc.s losses.

The Company operates under the name of Datameg Corporation and trades under the symbol DTMG on the OTCBB. The Companys active subsidiaries are American Marketing & Sales, Inc., NetSymphony Corporation, and QoVox Corporation, each of which the Company wholly owns.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

A. BASIS OF PRESENTATION AND ORGANIZATION (CONTD)

As of December 31, 2008, the Company had a total of five full time employees, one part-time employee, and two part time independent contractors or consultants. Of these, two individuals serve in administrative and senior management capacities.

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The accompanying consolidated financial statements present the consolidation of the financial statements of Datameg Corporation, its partially owned subsidiary, CASCommunications, Inc., and its wholly owned subsidiaries, American Sales and Marketing, Inc., QoVox Corporation, and NetSymphony Corporation. All intercompany transactions and balances have been eliminated in the consolidation.

Consolidation of Variable Interest Entities:

In January 2003 and revised December 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities."  This interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," requires consolidation by business enterprises of variable interest entities, as defined, when certain conditions are met. Pursuant to FIN No. 46, the Company continues to consolidate CASCommunications, Inc.

Basis of Accounting:

The accounts of the Company are maintained on the accrual basis of accounting whereby revenue is recognized when earned, and costs and expenses are recognized when incurred.

Use of Estimates:

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from those estimates.

Inventory:

The Companys inventory is stated at the lower of cost or market value. Cost is determined using the first in, first out method. Unusual losses resulting from lower of cost or market adjustments or losses on firm purchase commitments, if any, are disclosed, and if material, separately stated from cost of goods sold in the statement of operations.

Cash and Cash Equivalents:

Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase.





DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Property and Equipment:

Property and equipment are stated at cost. Depreciation and amortization are determined using the straight-line method over estimated useful lives ranging from three to eight years.

Fair Value of Financial Instruments:

The carrying value of cash, notes receivable, accounts payable and accrued expenses, and notes payable are assumed to approximate fair value because of the relatively short maturity of these instruments. However, since the Company has been unable to pay its liabilities as they became due, significant discounts that cannot be estimated, may be appropriate for liabilities.

Concentrations of Credit Risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company maintains its cash accounts with several commercial banks. Cash balances are insured by the Federal Deposit Insurance Corporation, up to $250,000 per financial institution. At December 31, 2008 and December 31, 2007, the Company had no uninsured cash balances.

Capital Structure:

SFAS No. 129, "Disclosure of Information about Capital Structure," requires a summary presentation of the pertinent rights and privileges of the various securities outstanding. The Companys voting common stock is comprised of 409,696,087 and 409,206,087 shares issued and outstanding, respectively, at December 31, 2008, of which 490,000 shares were repurchased by the Company and are being held in treasury. The Company had 391,950,062 shares issued and outstanding December 31, 2007. In April 2003, the Company amended its certificate of incorporation with the state of New York to increase the number of authorized shares of stock to 340,000,000 shares of common stock. In April 2005, the Company entered into an Agreement and Plan of Merger with Datameg Corp. NY setting forth the terms of our reincorporation from New York to Delaware. As part of the reincorporation the Company increased its authorized number of shares to 503,000,000, of which 10,000,000 are preferred shares and 493,000,000 are common shares. The Company also changed its par value from $0.01 to $0.0001 per share.

Reclassifications:

Some of the prior period balances have been reclassified to conform to current period presentation.

Revenue Recognition:

American Market & Sales, Inc.

The Company recognizes revenue from product sales in accordance with Staff Accounting Bulletin No. 104, which requires recognition when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and payment is reasonably assured. The Company has determined that these criteria have been met upon shipment, and recognizes revenue at that point. Pursuant to SFAS No. 5, "Accounting for Contingencies," the Company has examined collection history, financial conditions of clients, and general economic conditions and determined that it is not necessary to set an allowance for doubtful accounts, which have historically not been significant.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Revenue Recognition (contd):

NetSymphony Corporation and QoVox Corporation

The Company derives revenue from three primary sources: (1) system hardware component sales revenue, (2) software license revenue, and (3) services and maintenance and right to use revenue, which include support, maintenance, right to use fees and consulting.  Revenue on system hardware component sales is recognized upon delivery to and acceptance by the customer.  Software license revenue recognition is substantially governed by the provisions of Statement of Position No. 97-2, "Software Revenue Recognition," (SOP 97-2) issued by the American Institute of Certified Public Accountants.  The Company exercises judgment and uses estimates in connection with the determination of the amount of software license and services revenue to be recognized in each accounting period.  For software license arrangements that do not require significant modification or customization of the underlying software, the Company recognizes revenue when: (1) it enters into a legally binding arrangement with a customer for the license of software; (2) it delivers the products or performs the services; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; (4) collection is probable, and (5) vendor specific objective evidence (VSOE) of fair value exists to allocate the total fee among all delivered and undelivered elements in the arrangement.

Multiple Element Arrangements:

The Company typically enters into arrangements with customers that include perpetual software licenses, system hardware, maintenance, and right to use fees. Software licenses are sold on a per copy basis. Per copy licenses give customers the right to use a single copy of licensed software for exclusive use on the Companys system hardware. Assuming all other revenue recognition criteria are met, license revenue is recognized upon delivery using the residual method in accordance with SOP No. 98-9, "Modification of SOP 97-2: Software Revenue Recognition." Under the residual method, the Company allocates and defers revenue for the undelivered elements, based on VSOE of fair value, and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of each undelivered element in multiple element arrangements is based on the price charged when the same element is sold separately. If sufficient evidence of fair value cannot be determined for any undelivered item, all revenue from the arrangement is deferred until VSOE of fair value can be established or until all elements of the arrangement have been delivered. If the only undelivered element is maintenance and technical support for which the Company cannot establish VSOE, the Company will recognize the entire arrangement fees ratably over the maintenance and support term.

System hardware is hardware that is installed at a customer site for the purpose of utilizing the licensed software and as such, does not qualify as a separately deliverable element. The timing of revenue recognition from the sale of system hardware is therefore dependent upon the recognition of revenue for the related software licenses.

Maintenance and right to use fees includes updates (unspecified product upgrades and enhancements) on a when and if available basis, telephone support and bug fixes or patches and maintenance of the systems hardware, which would include repairs or replacement as necessary. VSOE of fair value for maintenance and right to use fees is based upon stated annual renewal rates. Maintenance and right to use fees revenue is recognized ratably over the maintenance and right to use term.



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Revenue Recognition Criteria:

The Company defines revenue recognition criteria as follows:

Persuasive Evidence of an Arrangement Exists.It is the Companys customary practice to have a purchase order prior to recognizing revenue on an arrangement.

Delivery has Occurred.The Companys software and systems hardware are physically delivered and installed at its customers site. The Company considers delivery complete when the software and system hardware products have been installed and the testing phase completed. The Company defers all the revenue until the testing phase has been completed and the Company receives customer acceptance.

The Vendors Fee is Fixed or Determinable.The Companys prices and services are indicated in invoices and service agreements. Customary payment terms are generally within 30 days after the invoice date.

Collection is Reasonably Assured.Due to a lack of customer history upon which a judgment could be made as to the collectability of a particular receivable, revenue is currently recognized upon shipment assuming all other conditions of the sale have been met.

Cost of Revenue:

Cost of revenue includes costs related to user license, systems hardware and maintenance and right to use fees revenue. Cost of user license revenue includes material, packaging, shipping and other production costs and third party royalties. Cost of systems hardware includes the cost of goods sold and installation costs. Cost of maintenance and right to use fees and consulting fees include related personnel costs, and hardware repair costs. Third party consultant fees are also included in cost of services.

Advertising:

Advertising costs are charged to operations as incurred. For the quarters ended December 31, 2008 and 2007, there were only minimal advertising costs charged to operations.

Research and Development:

The Company expenses research and development costs as incurred.

Software Development Costs:

Statement of Financial Accounting Standards (SFAS) No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,"requires capitalization of certain software development costs subsequent to the establishment of technological feasibility and readiness of general release. The Company also licenses from a third party the use of certain software that it utilizes in its products. These computer software license fees are expensed as incurred.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Income Taxes:

The Company, a C-Corporation, accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are determined based on 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. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The principal differences are net operating losses, startup costs and the use of accelerated depreciation methods to calculate depreciation expense for income tax purposes.

Stock-Based Compensation:

The Company follows guidance provided in SFAS No. 123R, "Accounting for Stock-Based Compensation," which requires companies to recognize expense for stock-based awards granted to employees or outside consultants based on their estimated fair value on the grant date.

Comprehensive Income:

SFAS No. 130, "Reporting Comprehensive Income," establishes standards for reporting comprehensive income and its components. Comprehensive income is defined as the change in equity during a period from transactions and other events from non-owner sources. Entities that do not have items of other comprehensive income in any period presented are not required to report comprehensive income. Accordingly the Company has not made any such disclosure in the statements presented herein.

Earnings Per Common Share:

The Company reports basic and diluted earnings per share (EPS) according to the provisions of SFAS No. 128, "Earnings Per Share."SFAS No. 128 requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by any convertible preferred dividends; the after-tax amount of interest recognized in the period associated with any convertible debt; and any other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. The Company also considers the potential effects of the exercise of options and warrants outstanding during the reporting period. Due to the Companys continuing net losses, potentially dilutive securities have historically had an antidilutive effect on EPS. Although the Company generated a net income for the year ended December 31, 2008, the average exercise price of the options and warrants outstanding exceeded the average fair market value of the Companys common stock. Exercising these instruments would also have an antidilutive effect. Accordingly, basic and diluted EPS are the same.











DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Recently Issued Accounting Pronouncements:

In May 2008, FASB issued Statement on Financial Accounting Standards (SFAS) No. 163, "Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60."Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, "Accounting and Reporting by Insurance Enterprises."That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, "Accounting for Contingencies."This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.

In May 2008, FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles."

In March 2008, FASB issued SFAS No. 161, "Disclosure about Derivative Instruments and Hedging Activities - an amendment to FASB Statement No. 133." The use and complexity of derivative instruments and hedging activities have increased significantly over the past several years. Constituents have expressed concerns that the existing disclosure requirements in FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," do not provide adequate information about how derivative and hedging activities affect an entity's financial position, financial performance, and cash flows. Accordingly, this Statement requires enhanced disclosures about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

In December 2007, FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51." This statement amends ARB No. 51 to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards of the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). This standard will not have current application to our financial statements.





DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

Recently Issued Accounting Pronouncements (contd):

In December 2007, FASB issued a revision to Financial Accounting Standards No. 141 (revised 2007), "Business Combinations."The objective of this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. This standard will have application on our financial statements, as we are actively seeking acquisition candidates.

Segment Information:

SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," requires public enterprises to report certain information about operating segments, including products and services, geographic areas of operations, and major customers. American Marketing and Sales, Inc. (AMS), is considered a separately reportable business segment that fulfills the Single Industry Dominance test, which eliminates the segment disclosure requirements if the segment accounts for 90% or more of combined revenue, reported profit, and assets. Thus, the revenues, profits, and assets reported in the consolidated financial statements are primarily those of AMS.

C. INVENTORY

AMS produces caterware for the food service industry via an intense heat injection molding process using Polystyrene/Polypropylene recycled resins. The raw materials and finished goods are produced and held by two third-party manufacturing plants, from where they are shipped to customers across the nation. AMS does not enter into long-term contracts and generally experiences a high inventory turnover ratio while maintaining minimal quantities on-hand in the warehouses. At December 31, 2008, AMS had raw materials, work in process, and finished goods totaling $88,635, $178,423, and $17,163, respectively, and at December 31, 2007, AMS held raw resins totaling $301,724.

QoVoxs inventory consists of various components of its network assurance telecommunications system held for specific sale-on-approval contracts. At December 31, 2008 QoVox held raw materials and finished goods of $927 and $25,038, respectively.

D. RELATED PARTY TRANSACTIONS

At December 31, 2007, the Company was indebted to officers and stockholders in the amount of $28,560 for advances received and expenses incurred on behalf of the Company. During 2008, $16,660 of this amount was forgiven and recognized as an increase to Additional Paid-In Capital. The Company also received another $300 advance, resulting in a balance of $12,200 at December 31, 2008. This is exclusive of amounts included in accrued compensation. Interest was not imputed on these advances due to immaterial impact on the financials, and the amounts will be repaid as cash flows allow.



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

E. NOTES PAYABLE

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Principal balance
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | December 31,     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2008             
|On October 29, 2001, the Datameg VA (a former subsidiary of the Company) signed a confessed judgment promissory note with a law firm acknowledging monies owed amounting to $596,802, which had been previously accrued. The note accrued interest at a rate of 9% and matured on December 31, 2001. On January 7, 2002, the Company received a notice of default and as of January 1, 2002 the outstanding balance was increased 5% and began to accrue interest at an annual rate of 15%. The Company no longer acknowledges this debt as its legal obligation. Accordingly, principal and interest of $596,802 and $641,046 were written off to other income at December 31, 2008 (Note O). Accrued interest on the note totaled $551,425 at December 31, 2007 and was included in accounts payable and accrued expenses.                                                                                                 | $ -              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                  
|On July 21, 2006, the Company signed a settlement and mutual release and promissory note with former counsel, whereby the Company was required to pay the principal sum of $155,000 in past-due fees and other costs, plus 6% interest. The Company was current on its payments through November 2008, but did not make the full December 15, 2008 payment pursuant to the payment schedule. Accordingly, the Company is in default at December 31, 2008. The Company has made $87,500 in principal payments ($32,500 during the current year), and the remaining $67,500 principal is payable as follows:

$10,000.00 on or before December 15, 2008, ($7,500 unpaid)
$10,000.00 on or before March 15, 2009, and ($10,000 unpaid)
$50,000.00 plus all accrued and unpaid interest on or before June 15, 2009.Accrued interest on the note totaled $16,881 and $0 at December 31, 2008 and December 31, 2007, respectively. | 67,500           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                  
|On July 1, 2008, the Companys QoVox subsidiary entered into a promissory note with one of its consultants for $230,605, which represents past-due fees previously included in accounts payable. Payment terms stated therein require monthly installments of $1,000 paid to the consultant the last day of each month commencing July 31, 2008 through December 31, 2008; $2,000 per month January through September 2009; and $3,000 per month thereafter until the remaining balance is paid. Interest at 8% resulted in accrued interest for the year of $9,171, which is included in accounts payable and accrued expenses. As of December 31, 2008, the Company was in default and the principal balance has been reflected as a current liability in accordance with the promissory note terms.                                                                                                                       | 227,605          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                  



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

E. NOTES PAYABLE (CONTD)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Principal balance
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | December 31,     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2008             
|As part of the purchase of American Marketing and Sales, Inc., (AMS), the Company entered into a $4 million note secured by the assets and stock of AMS and payable to the former stockholders of AMS. The note provides for increases to principal for loans made by AMS to Datameg or its subsidiaries up to $500,000. To raise the cap on additional loans up to $1 million from AMS, Datameg entered into a stock pledge agreement with the former stockholders, pledging its stock in NetSymphony. At the time of the pledge agreement, NetSymphony assets were valued at $0. The note accrues interest at 6% and the entire note balance, including accrued interest, is due and payable on December 7, 2009. Accrued interest totaled $240,000 and $0 at December 31, 2008 and 2007, respectively, and is included in accounts payable and accrued expenses. | 4,000,000        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                  
|In May 2007, American Marketing and Sales, Inc. entered into a note payable with Flagship Bank of Leominster, MA for $400,000. The note accrues interest at prime less .75% (approximately 6.5%), carries monthly payments that annually total of $93,918, and matures in May 2012. The Company is current on its payments, so there was no accrued interest at December 31, 2008 or 2007. Future maturities as of December 31, 2008 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                | 278,721          





|Dec. 31, | Payments | Principal | Interest
|-------- | -------- | --------- | --------
|2009     | 86,092   | 69,224    | 16,868  
|2010     | 93,918   | 83,183    | 10,735  
|2011     | 93,918   | 88,754    | 5,164   
|2012     | 37,979   | 37,560    | 419     
|Totals   | 311,907  | 278,721   | 33,186  







|                                                                                                                                                                                                            |            |  |           
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- |  | ----------
|The July 2003 promissory note payable to a former consultant totaling $247,007 included in notes payable at December 31, 2007 has been reclassified to Judgments Payable at December 31, 2008 (see Note H). | -          |  | 247,007   
|                                                                                                                                                                                                            |            |  |           
|Total notes payable                                                                                                                                                                                         | 4,573,826  |  | 5,304,336 
|Less current portion                                                                                                                                                                                        | (364,329)  |  | (956,877) 
|                                                                                                                                                                                                            |            |  |           
|Total notes payable  long-term                                                                                                                                                                             | $4,209,497 |  | $4,347,459





DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

F. STOCK SUBSCRIPTION RECEIVABLE, LONG-TERM

On March 5, 2004, the Company entered into a stock subscription agreement with a foreign investor to purchase 2,941,176 shares of the Companys common stock at a purchase price of $0.17 per share. On April 1, 2004, the investor made an initial subscription payment of $80,000 and the Company issued and delivered the full 2,941,176 shares of restricted Common Stock to the investor with the understanding that the investor was sending the Company the $420,000 balance and a stock subscription receivable was duly recorded on the Companys books in the amount of $420,000. On April 14, 2004, the investor notified the Company of the investors intent not to invest further in the Company. The Company offered to issue a new stock certificate in the amount of 470,588 shares to accommodate the $80,000 initial subscription payment in exchange for the investors return of the stock certificate issued and delivered to the investor on April 1, 2004 for the full share amount of 2,941,176 shares.The investor refused the Companys exchange offer and has continued to refuse to return the stock certificate for 2,941,176 shares.

The Company is convinced of the merits of its claim against the investor and intends to institute a legal action to vindicate that claim in 2009. The Company has retained Massachusetts litigation counsel. Given the uncertainties inherent in litigation, the Company took a charge of $105,000 (25%) against the receivable in the fourth quarter of 2006, another charge of $105,056 in the fourth quarter of 2007, and a third charge of $105,000 during the fourth quarter of 2008, resulting in a $105,000 and $210,000 balance at December 31, 2008 and December 31, 2007, respectively.

G. NET LOSS PER COMMON SHARE

As required by SFAS No. 128, the following is a reconciliation of the basic and diluted EPS calculations for the periods presented:



|                                            | Years Ended
December 31,
|------------------------------------------- | ------------------------
|                                            | 2008                    
|Net Income (Loss) (numerator)               | $ 794,792               
|Weighted Average Shares (denominator)       | 398,863,987             
|Basic and diluted net loss per common share | $ -                     

As required by the Securities and Exchange Commission Staff Accounting Bulletin No. 98, the above calculation of EPS is based on SFAS No. 128, "Earnings Per Share."Although the Company generated a net income for the year ended December 31, 2008, the average exercise price of the options and warrants outstanding exceeded the average fair market value of the Companys common stock during the year. Exercising these instruments would have an antidilutive effect. Thus, total options and warrants outstanding as of December 31, 2008 and 2007 of 35,400,000 and 66,723,704, respectively, are not included in the calculation of diluted EPS.



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

H. JUDGMENTS PAYABLE

In July 2003, the Company signed a promissory note with a professional for fees and the interest on unpaid fees due that professional through September 30, 2003 in the amount of $247,007. The note was due on August 15, 2003 and was guaranteed personally by the Companys Chairman. The note stated an interest rate of 18% per annum, which had been accrued since the notes inception and totaled $222,442 and $200,166 at September 30, 2008 and December 31, 2007, respectively. No significant payments had been made on the note, and on September 25, 2007, the note holder filed suit, seeking to have a judgment rendered against the Company for all amounts claimed due. On June 23, 2008, the court entered judgment for the full principal and interest on the promissory note. On August 15, 2008, the parties entered into a settlement agreement requiring the Company to pay the plaintiff in full settlement of this case, the sum of $555,000 pursuant to the following schedule:



|Number        | Amount    | Due      
|------------- | --------- | ---------
|1             | $ 100,000 | 9/18/2008
|2             | 65,000    | 1/6/2009 
|3             | 65,000    | 4/6/2009 
|4             | 65,000    | 7/7/2009 
|5             | 65,000    | 10/6/2009
|6             | 65,000    | 1/7/2010 
|7             | 65,000    | 4/6/2010 
|8             | 65,000    | 7/7/2010 
|              | 555,000   |          
|Payment       | (100,000) |          
|Bal, 12/31/08 | $ 455,000 |          

The principal and interest on the settlement date totaling $469,449 were reclassified from accounts and notes payable to judgments payable, and an additional $85,551 was accrued to record the full settlement amount. After making an initial payment of $100,000, the Company defaulted on the January 2009 payment. Additional negotiations ensued and the Company and plaintiff entered into a second settlement agreement wherein plaintiff will accept (in escrow) 10 million Datameg common shares as payment of the judgment if certain events are concluded on or before June 1, 2009 (Note Q). If not, the second settlement is void and the 10 million shares in escrow are to be returned for cancellation.

1. STOCKHOLDERS EQUITY

In the first quarter of 2008, American Marketing and Sales, Inc., pursuant to the acquisition agreement with the Company, paid $373,641 in cash dividends to the selling stockholders to offset taxes incurred by them due to the acquisition.

In June 2008, the Company issued 15,000,000 stock options to its legal counsel. The options were immediately vested resulting in compensation expense of $60,000. In September 2008, the Company issued 750,000 stock options in Director compensation. Of these options, 500,000 were immediately vested, resulting in compensation expense of $2,500.

In September 2008, the Company cancelled 1,000,000 shares of issued and outstanding stock pursuant to a settlement agreement dated January 9, 2008 whereby alleged debts owed between the Company and former consultants were forgiven. The terms of the settlement were accounted for in the prior year due to their material impact on the December 31, 2007 financials, but the Company was awaiting the return of the stock certificate in question prior to canceling the stock.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

1. STOCKHOLDERS EQUITY (CONTD)

During 2008, the Company issued 6,225,000 shares of common stock at $.01 and $.025 per share for total cash of $103,125. Of this amount, $3,000 was received in March 2009, resulting in a current asset stock subscription receivable at December 31, 2008.

During 2008, the Company issued a total of 12,521,025 shares of its common stock and prices ranging from $.0098 to $.04 to management, vendors, and legal counsel in lieu of cash for services rendered. Of this amount, $103,580 (5,187,500 shares) represented payment for services rendered and expensed during 2008 (including 3,000,000 shares at $.0265 issued to AMS management as $79,500 in compensation pursuant to the NetSymphony stock pledge agreement  Note E), $88,671 (3,583,525 shares) represented repayment for services performed in prior years (including satisfaction off a $9,750 liability for stock to be issued initially expensed in 2005 upon engagement of legal counsel), and $36,750 (3,750,000 shares) represented prepayment for future services.

In December 2008, the Company repurchased from a prior officer 490,000 shares of its issued and outstanding stock, which will be retained and reissued in the near future. The treasury stock was recorded at repurchase cost of $7,840 and is reported as a decrease to stockholders equity.

J. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:



|                               | December 31,
|------------------------------ | ------------
|                               | 2008        
|Equipment                      | $ 81,220    
|Furniture                      | 13,806      
|Automobiles                    | 66,682      
|Capital Leases                 | 35,100      
|Tooling Molds                  | 3,019,612   
|Total property and equipment   | 3,216,420   
|Less: accumulated depreciation | (897,079)   
|Property and equipment, net    | $ 2,319,341 



Depreciation expense totaled $747,195 and $73,125 for the years ended December 31, 2008 and 2007, respectively, of which $721,123 and $60,439, respectively, is attributable to the tooling molds used in production and has therefore been reported with cost of goods sold on the statement of operations.

During 2008, the Company traded in some old vehicles with a carrying value of $20,461 for new vehicles with a cost of $66,682, resulting in a gain on trade-in of $46,221.



K. STOCK OPTIONS AND WARRANTS

During the years ended December 31, 2007, the Company granted options and warrants to consultants, employees, and investors to purchase 11,225,000 shares of common stock, at prices ranging from $0.01 to $0.25 per share. The vesting of the stock options resulted in an expense in the amount of $114,420 and $328,360 during the years ended December 31, 2008 and 2007, respectively. Of the options and warrants granted since inception, options and warrants for shares are unexercised and expire between January 2008 and January 2013.



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007



K. STOCK OPTIONS AND WARRANTS (CONTD)

A summary of option and warrant activity, for both employees and consultants, for the years ended December 31, 2008 and 2007 is as follows:

|                                           | # of Shares | Price Per Share | Weighted Ave Price Per Share
|------------------------------------------ | ----------- | --------------- | ----------------------------
|                                           |             |                 |                             
|Outstanding, December 31, 2006             | 102,739,243 | $0.01 - $0.25   | $0.13                       
|Options and warrants granted               | 11,225,000  | $0.06 - $0.07   | $0.07                       
|Options and warrants exercised             | 187,500     | $0.04           |                             
|Options and warrants expired or terminated | 47,053,039  | $0.01 - $0.25   | $0.13                       
|                                           |             |                 |                             
|Outstanding, December 31, 2007             | 66,723,704  | $0.01 - $0.25   | $0.14                       
|                                           |             |                 |                             
|Options granted                            | 15,750,000  | $0.03           |                             
|Options expired or terminated              | 22,986,250  | $0.03           |                             
|Warrants expired or terminated             | 24,087,454  | $0.04 - $0.10   | $0.06                       
|                                           |             |                 |                             
|Outstanding, December 31, 2008             | 35,400,000  | $0.01 - $0.17   | $0.06                       



At December 31, 2008 the weighted average remaining life of outstanding stock options and warrants, for both employees and consultants, was approximately 24 months.

The fair value of options and warrants granted in 2008 are estimated on the date of the grant using a type of Black Scholes option pricing model. During the year ended December 31, 2008, the following assumptions were used to value grants: dividend yield of 0%, volatilities ranging from 70-80, terms varied based on the negotiated term of the options agreement, and risk free interest rates varied based on the Treasury bond yield with a term comparable to the length of the term listed in the options agreement.

L. GOING CONCERN

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has sustained substantial costs in implementing its action plan. In addition, the Company used substantial amounts of working capital in funding these costs. At December 31, 2008, current liabilities exceeded current assets by $1,185,081. The Company is seeking to raise additional capital and develop partnerships and cooperative agreements. In view of these matters, the ability of the Company to continue as a going concern is dependent upon the Companys ability to achieve its business objectives and the success of its future operations.

M. ACCOUNTS RECEIVABLE

NetSymphony and QoVox have no receivables due to absence of revenues. Accounts receivable for American Marketing and Sales, Inc. totaled $1,250,973 and $1,616,605 at December 31, 2008 and 2007, respectively. Pursuant to SFAS No. 5, "Accounting for Contingencies," the Company has examined collection history, financial conditions of clients, and general economic conditions and determined that it is not necessary to set an allowance for doubtful accounts, which have historically not been significant.

DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

N. INCOME TAXES

A reconciliation of income tax expense (benefit) at the statutory rate to the Companys effective rate for 2008 and 2007 is as follows:

|                                                    | 2008        |  | 2007        |  | 2006       
|--------------------------------------------------- | ----------- |  | ----------- |  | -----------
|Computed at the expected statutory rate (35%)       | $ 278,000   |  | $ (571,000) |  | $ (528,000)
|State income tax net federal tax benefit            | 40,000      |  | (81,000)    |  | (75,000)   
|Compensatory stock options cancelled or expired     | 670,000     |  | 324,000     |  | -          
|NOLs used                                          | (343,000)   |  | -           |  | -          
|Adjustment to prior years deferred tax asset       | 1,379,000   |  | -           |  | -          
|Less: valuation allowance change, net of NOLs used | (2,024,000) |  | 328,000     |  | 603,000    
|Total expense (benefit) for income taxes            | $ -         |  | $ -         |  | $ -        

Deferred tax assets and (liabilities) at December 31, 2008 and 2007 are as follows:

|                                          | 2008        |  | 2007        |  | 2006       
|----------------------------------------- | ----------- |  | ----------- |  | -----------
|Deferred tax assets:                      |             |  |             |  |            
|Net operating loss carry forwards (NOL's) | $ 3,184,000 |  | $ 3,527,000 |  | $ 4,418,000
|Depreciation and amortization             | (20,000)    |  | (20,000)    |  | (20,000)   
|Stock option compensation                 | 260,000     |  | 905,000     |  | 1,065,000  
|Gross deferred tax assets                 | 3,424,000   |  | 4,412,000   |  | 5,463,000  
|Valuation allowance                       | (3,424,000) |  | (4,412,000) |  | (5,463,000)
|Net deferred tax assets                   | $ -         |  | $ -         |  | $ -        



The Company has available at December 31, 2008 approximately $7,959,928 of unused net operating loss carry forwards that may be applied against future taxable income that expire in 2019 through 2026. Due to stock ownership changes and other income tax statutes, the ability to benefit from the net operating loss carry forwards may be significantly restricted. Accordingly, for this and other reasons, including uncertainties regarding the Companys ability to generate taxable income sufficient to utilize NOLs prior to their expiration, a valuation allowance has been provided against the deterred tax assets.

O. DEBT WRITE-OFF

Management and legal counsel determined that the statute of limitations had expired on several liabilities or their payment was remote based on aging and lack of collection efforts by creditors. Accordingly, debts totaling $2,342,302, consisting of $1,060,813 in accounts payable and $1,281,489 in notes payable and settlements (including accrued interest), were written off to other income at December 31, 2008.

P. COMMITMENTS AND CONTINGENCIES

In October 2004, Datameg signed a lease agreement for office space in Raleigh, North Carolina. The term of the lease was for 37 months beginning December 2004 and ending in January 2008, and called for monthly payments of approximately $5,000.



DATAMEG CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

P. COMMITMENTS AND CONTINGENCIES (CONTD)

In January 2008 upon expiration of the above lease agreement, the Company entered into a lease agreement at a new location for approximately 2,600 square feet of space at 7200 Falls of the Neuse Road, Suite 101, Raleigh, North Carolina 27615. The term of the lease is for 26 months beginning December 1, 2007 and expiring January 31, 2010. The monthly rent is approximately $1,950. The property is being used to market and develop NetSymphonys products.

American Marketing and Sales, Inc. rents a 3600-square-foot showroom and warehouse at 20 Mohawk Drive, Leominster, MA 01453. The arrangement is month-to-month and cancellable at any time. Monthly payments are $1,200 and include taxes and utilities. Total rent expense for all operating leases was approximately $48,000 and $60,000 for the years ending December 31, 2008 and 2007, respectively.

Q. SUBSEQUENT EVENTS

Material Definitive Agreement:

On March 18, 2009, the Company entered into a Stock Purchase Agreement and purchase money promissory note Assignment and Assumption Agreement incident to its proposed sale of its wholly owned subsidiary American Marketing and Sales, Inc. ("AMS") to an unrelated third party ("Buyer"). The sale is subject to the consent of a majority of the Companys stockholders. Some of the Companys principal shareholders ("Principal Shareholders) also hold a purchase money note ("Note") secured by all of the assets of AMS concerning an election to return the 15 million Datameg shares previously issued in the acquisition of AMS in December 2007, in favor of full payment of the purchase money note. As of December 31, 2008, the principal and interest due on the Note is approximately $5.4 Million, consisting of a promissory note issued in the December 2007 AMS acquisition with a face amount of $4 Million, and additional loans and accrued interest of approximately $1,418,000.

The Stock Purchase Agreement provides that Datameg (or its shareholders of record) shall receive 1 Million shares of the Buyers common stock (restricted with piggy-back registration rights) in exchange for the transfer of AMS shares to the Buyer. Datameg shall deliver to the Principal Shareholders from escrow 15 Million shares of Datameg common stock in exchange for (1) a complete release of Datameg and its directors and officers, etc. from further liability upon the Note, (2) the Principal Shareholders written consent to the assumption of the Note by the Buyer, (3) the Buyers written assumption of the Note, and (4) the Principal Shareholders and the Buyers agreement to extend the term of the Note for one year. During the term of the extended Note, AMS President shall have the right to convert the principal and interest then due into the Buyers common stock (restricted with piggy-back registration rights) at the price of $6 per share. For its assumption of the additional loans from AMS on the Note, the Buyer shall be issued 50Million unregistered Datameg common shares at the closing.

The Principal Shareholders shall release their security interest in NetSymphony Corporation stock and return the stock certificate to Datameg. In consideration of their aforementioned acts and consents, the Buyer shall deliver to the Principal Shareholders 400,000 shares of the Buyers common stock (restricted with piggy-back registration rights).

Stock Purchase:

On March 18, 2009, the Company issued 2,000,000 shares of stock at $.025 per share for total cash proceeds of $50,000 pursuant to a private placement.

|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------



Not Applicable.

|Item 9A(T). | Controls and Procedures.
|----------- | ------------------------



The Companys management, consisting of our Chief Executive Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2008. Based upon this evaluation, our Chief Executive Officer concluded that, as of December 31, 2008, our disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms.

As a result of our December 31, 2008 audit, we have learned that our disclosure controls and procedures have failed to properly account for the provisions of SFAS 5 "Contingencies."These issues were not detected to allow timely decisions regarding their accounting and disclosure. Corrective action will be taken in the future to properly evaluate and disclose Companys liabilities as required by SFAS 5. The Company will ensure that each liability is reviewed under SFAS 5, which will be accomplished by hiring a CFO and implementing further training of current personnel. Additional written policy guidance will also be adopted.

Managements Annual Report on Internal Control Over Financial Reporting

Our Chief Executive Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company. Internal control over financial reporting is a process designed 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. Our management conducted an assessment of the effectiveness of the Companys internal control over financial reporting as of December 31, 2008 based on criteria established in "Internal ControlIntegrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, the Companys management concluded that, as of December 31, 2008, the Companys internal control over financial reporting was not effective.

As a result of our current audit, we learned that our internal controls over financial reporting failed to properly account for the provisions of SFAS 5, "Contingencies." Corrective action will be taken in the future to properly evaluate and disclose Companys liabilities as required by SFAS 5. The Company will ensure that each liability is reviewed under SFAS 5, which will be accomplished by hiring a CFO and implementing further training of current personnel. Additional written policy guidance will also be adopted.

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934, as amended) during our last fiscal quarter and our year ended December 31, 2008 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report 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.



|Item 9B. | Other Information.
|-------- | ------------------



None.



PART III



|Item 10. | Directors, Executive Officers, and Corporate Governance.
|-------- | --------------------------------------------------------

Directors and Executive Officers



|Name             |  | Age |  | Position                                                                                                                                               |  | Held Since
|---------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------
|James Murphy     |  | 56  |  | Chairman, Chief Executive Officer, President and Director of Datameg Corporation and Director and President of NetSymphony Corporation and QoVox, Inc. |  | Dec. 2005 
|Leonard Tocci    |  | 67  |  | President, American Marketing and Sales                                                                                                                |  | Dec. 2007 
|Gerald C. Bellis |  | 80  |  | Director of Datameg Corporation                                                                                                                        |  | Sept. 2008
|Dan Ference      |  | 60  |  | Chief Operating Officer of QoVox Corporation                                                                                                           |  | Sept. 2001
|Neil R. Gordon   |  | 59  |  | Director of Datameg Corporation                                                                                                                        |  | Sept. 2005

Each of our directors will hold his directorship until the next annual meeting of our shareholders or until his successor is duly elected and qualified. Mr. Murphy will hold his position as our Chairman, Chief Executive Officer and President until the next annual meeting of the directors or until his successor is duly elected and qualified



Mr. Murphy has a wide range of business experience including a highly successful partnership in Building #19 Corporation, and served as President of Sportbuild, Inc., a subsidiary of the Building #19 Corporation. Mr. Murphy has also been a successful partner in several other companies.

Leonard Tocci, President of American Marketing and Sales, Inc.

Mr. Tocci has a history of success in his 44-year career in the plastics industry. From 1988 to 1998, he served as president and CEO of Tamor Plastics, where he grew sales from $25 million in 1991 to more than $100 million in 1998.

Following graduation from the University of Bridgeport in 1963, Mr. Tocci began his career by joining Tucker Housewares Corp. where he rose to the position of vice president and director of marketing. Under his direction, Tucker became one of the leading manufacturers of houseware products in the U.S., second only to Rubbermaid. Tuckers sales rose from $7.5 million in 1968 to more than $76 million in 1984. A proven entrepreneur, Mr. Tocci also founded and owned American Hanger, Inc., a manufacturer of plastic hangers, which grew to more than $18 million in annual revenues under his direction.

Gerald C. Bellis, Director

On September 12, 2008, the Board of Directors of Datameg Corporation elected Gerald C. Bellis as a new director. Mr. Bellis has over 40 years of experience in the management of high technology manufacturing companies at every level of responsibility through CEO. As compensation, Mr. Bellis receives 500,000 Datameg options vesting immediately with an exercise price of $.025/ share and an additional 250,000 Datameg options vesting on April 1, 2009 with an exercise price of $.035 / share. Mr Bellis is expected to serve on the SOX Compliance Committee. Mr. Bellis is also expected to engage in significant oversight of NetSymphonys operations.







Mr. Ference has served as Chief Operating Officer of QoVox Corporation since July 2005. Mr. Ference served as the President and Chief Executive Officer of QoVox from September 2001 to July 2005. Mr. Ference has over 27 years experience in the communications industry with various voice and data products and technologies, including almost 20 years of managing research and development programs and centers. From May 1994 to June 2001, Mr. Ference was vice president of Fujitsu Network Communications Raleigh, North Carolina Development Center, where he was responsible for overall Development Center Operations and the Network Management and related Network Element development programs. Prior to this, his career included serving at Bell Laboratories, ITT Network Systems, CITAlcatel, and Nortel, Inc. Mr. Ference holds a B.S. degree from Penn State University and an M.S. degree from Ohio State University both in Electrical Engineering.



We have a standing audit committee comprised of three members of the Board of Directors, two of whom are independent. We do not have an audit committee financial expert. As we generate revenue in the future, we intend to identify and appoint a financial expert to serve on our audit committee.

Code of Ethics

Due to a lack of adequate resources, we have not yet adopted a code of ethics. Prior to the adoption of a code of ethics, our management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with applicable governmental laws and regulations.



|Item 11. | Executive Compensation.
|-------- | -----------------------

The below table sets forth the total compensation paid to or accrued for the years ended December 31, 2006 through 2008 to our chief executive officer and our other most highly compensated executive officers who were serving as executive officers at the end of our last fiscal year. None of our other executive officers earned more than $100,000 in total annual salary and bonus in the most recently completed fiscal year.

Summary Compensation Table

|              |                                              |      | Annual       | Other  | Long Term Compensation
|------------- | -------------------------------------------- | ---- | ------------ | ------ | ----------------------
|              |                                              |      | Compensation | Annual | Awards                
|Name          | Position                                     | Year | Salary       |        | Bonus                 
|              |                                              |      | ($)          |        | ($)                   
|              |                                              |      |              |        |                       
|              |                                              |      |              |        |                       
|James Murphy  | President Datameg/ QoVox/ NetSymphony        | 2008 | $150,000     |        | $0                    
|James Murphy  | President Datameg/ QoVox/ NetSymphony        | 2007 | $150,000     |        | $0                    
|James Murphy  | President Datameg/ QoVox/ NetSymphony        | 2006 | $150,000     |        | $0                    
|Leonard Tocci | President American Marketing and Sales, Inc. | 2008 | $200,000     | (1)    | $0                    
|Leonard Tocci | President American Marketing and Sales, Inc. | 2007 | $200,000     | (1)    | $0                    
|Dan Ference   | COO QoVox                                    | 2008 | $144,000     |        | $0                    
|Dan Ference   | COO QoVox                                    | 2007 | $144,000     |        | $0                    
|Dan Ference   | COO QoVox                                    | 2006 | $144,000     |        | $0                    

(1) Only the portion of the Mr. Toccis 2007 salary earned subsequent to the date of the American Marketing and Sales, Inc. acquisition, December 7, 2007, has been presented in the consolidated statement of operations.

At December 31, 2008, our executive officers had the following outstanding options:

|                 |                      |     | Percent of total     |                  |  |                   
|---------------- | -------------------- | --- | -------------------- | ---------------- |  | ------------------
|                 | Number of Securities |     | Options/SARs         |                  |  |                   
|                 | Underlying Options/  |     | Granted to Employees | Exercise or base |  |                   
|Name             | SARs Granted (#)     |     | In fiscal year       | Price ($/sh)     |  | Expiration Date(s)
|James Murphy     | 2,500,000            | (1) | -                    | $0.10 per share  |  | 12/28/2010        
|James Murphy     | 2,500,000            | (1) | -                    | $0.17 per share  |  | 12/28/2010        
|James Murphy     | 1,000,000            | (1) | -                    | $0.05 per share  |  | 9/1/2008          
|James Murphy     | 1,000,000            | (1) | -                    | $0.05 per share  |  | 12/28/2010        
|Daniel Ference   | 6,250,000            | (2) | -                    | $0.06 per share  |  | 12/31/2010        
|Neil Gordon      | 750,000              | (1) | -                    | $0.04 per share  |  | 9/22/2010         
|Gerald C. Bellis | 750,000              | (1) | -                    | $0.03 per share  |  | 9/12/2010         

1. All options are fully vested.
2. In January 2007, the Company settled outstanding fees for services rendered during 2006 and prior. Included in the settlement was the cancellation and replacement of his prior option agreements for the exercise of 5,500,000 and 2,000,000 options at $.15 and $.18, respectively, with the option to purchase 6,250,000 shares at $.06. Since the circumstances leading to the settlement were in existence at December 31, 2007 and related to services rendered during 2006 and prior, the options were considered issued and outstanding at December 31, 2007 and an incremental compensation expense resulting from the cancellation and replacement of the option agreements of $64,800 was recorded during 2006.

Directors Remuneration

We do not currently compensate our directors for serving on the board of directors, other than through options as discussed above.



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|-------- | -----------------------------------------------------------------------------------------------

The following table sets forth the following information about the beneficial ownership of our common stock outstanding of 409,206,087 as of December 31, 2008 by (i) each person who we know is the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. We are not aware of any beneficial owner of more than 5% of the outstanding common stock. Unless otherwise indicated, the address of each named beneficial owner or executive officer is c/o Datameg Corporation, 2150 S 1300 E, Suite 500, Salt Lake City, UT 84107.

|NAME                              |                      | AMOUNT AND NATURE OF |     | PERCENT OF CLASS(3)
|--------------------------------- | -------------------- | -------------------- | --- | -------------------
|DIRECTOR OR EXECUTIVE OFFICER     | BENEFICIAL OWNERSHIP
|James Murphy                      |                      | 18,560,000           | (3) |                    
|Leonard Tocci                     |                      | 20,091,666           |     |                    
|Neil Gordon                       |                      | 750,000              | (4) |                    
|Gerald C. Bellis                  |                      | 750,000              | (5) |                    
|Dan Ference                       |                      | 8,500,000            | (6) |                    
|Directors and Officers as a Group |                      | 48,651,666           |     |                    

(1)

(2)

(3) Including 7,000,000 shares of our common stock that Mr. Murphy has the right to acquire through the exercise of fully vested stock options.

(4) Including 750,000 shares of our common stock that Mr. Gordon has the right to acquire through the exercise of fully vested stock options.

(5) Including 750,000 shares of our common stock that Mr. Bellis has the right to acquire through the exercise of fully vested stock options

(6) Including 6,250,000 shares of our common stock that Mr. Ference has the right to acquire through the exercise of fully vested stock options.



|Item 13. | Certain Relationships and Related Transactions, and Director Independence.
|-------- | --------------------------------------------------------------------------

The Companys officers and stockholders occasionally advance the Company money or make purchases in the Companys behalf. As of December 31, 2008 and December 31, 2007, the Company was indebted to officers and stockholders in the amount of $12,200 and $28,560, respectively. This is exclusive of amounts included in accrued compensation. Interest was not imputed on these advances due to immaterial impact on the financials, and the amounts will be repaid as cash flows allow.



|Item 14. | Principal Accounting Fees and Services.
|-------- | ---------------------------------------

|Fiscal Year  |  |          |        | Audit    |   |          |  | All      |       |       |   |  
|------------ |  | -------- | ------ | -------- | - | -------- |  | -------- | ----- | ----- | - | -
|Ended        |  | Audit    |        | Related  |   | Tax      |  | Other    |       | Total |   |  
|December 31, |  | Fees (1) |        | Fees (2) |   | Fees (3) |  | Fees (4) |       | Fees  |   |  
|2008         |  | $        | 88,400 |          | $ | 0        |  | $        | 0     |       | $ | 0
|2007         |  | $        | 92,000 |          | $ | 0        |  | $        | 5,000 |       | $ | 0

(1)

(2)

(3)

(4)

Audit Committees Pre-Approval Policies and Procedures

Our president pre-approves all professional services and fees provided by our principal accountants. During 2008 and 2007, our sole director approved only professional services rendered by our principal accountants for the audit of our annual financial statements and review of our financial statements included in our Forms 10-QSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years and tax compliance.



|Item 15. | Exhibits.
|-------- | ---------

(a)(1) Financial Statements

Our consolidated financial statements and notes to our consolidated financial statements filed with this report are set forth herein.

(a)(3) Exhibits

|Exhibit |                                                                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                         
|        |                                                                                                                                                                     
|2.10    | Agreement and Plan of Merger between Datameg Corp., a New York corporation ("Datameg NY"), and Datameg Corporation, a Delaware corporation, dated April 27, 2005.(1)
|        |                                                                                                                                                                     
|3.10    | Certificate of Incorporation of Datameg Corporation, a Delaware corporation, dated April 27, 2005.(1)                                                               
|        |                                                                                                                                                                     
|3.20    | Bylaws of Datameg Corporation, a Delaware corporation, effective as of April 27, 2005.(1)                                                                           
|        |                                                                                                                                                                     
|5.10    | Opinion of Duane Morris LLP as to legality of securities being registered.                                                                                          
|        |                                                                                                                                                                     
|10.10   | Engagement Agreement between Datameg Corporation and 350 Group, LLC, dated April 28, 2005.(1)                                                                       
|        |                                                                                                                                                                     
|10.20   | Form of Convertible Promissory Notes issued in May and June 2004, together with table identifying issuance date, noteholder, amount and conversion price.(2)        
|        |                                                                                                                                                                     
|10.30   | Form of Subscription Agreement, Individual Investor Questionnaire, Sample Convertible Promissory Note and Sample Warrant for Common Stock.(3)                       
|        |                                                                                                                                                                     
|10.40   | Joint Sales and Marketing Agreement, dated as of July 16, 2004, by and between North Electric Company and Tekno Telecom LLC.(4)                                     
|        |                                                                                                                                                                     
|10.50   | Exclusive Distribution Agreement, dated January 1, 2004, by and between North Electric Company, Inc. and International Network Technology, Ltd.(5)                  
|        |                                                                                                                                                                     
|10.60   | Release dated as of April 1, 2005, by an among Datameg NY and Hickey Hill Partners, LLC.(6)                                                                         
|        |                                                                                                                                                                     
|10.70   | Subscription Agreement, dated March 5, 2004, by and between Datameg and Mei Chung Tang Lee.(2)                                                                      
|        |                                                                                                                                                                     
|10.80   | Consulting Agreement, dated as of August 6, 2004, by and between Datameg NY and Mark McGrath.(6) (*)                                                                
|        |                                                                                                                                                                     
|10.90   | Option Agreement between Datameg NY and Mark McGrath, dated as of April 17, 2005.(1) (*)                                                                            
|        |                                                                                                                                                                     
|10.10   | Option Agreement between Datameg Corporation and Mark P. McGrath, dated as of July 25, 2005.(7) (*)                                                                 
|        |                                                                                                                                                                     
|10.11   | Management Consultant Agreement between William J. Mortimer and QoVox Corporation, dated July 18, 2005.(7) (*)                                                      
|        |                                                                                                                                                                     
|10.12   | Restricted Stock Agreement between William J. Mortimer and Datameg Corporation, dated as of July 25, 2005.(7) (*)                                                   
|        |                                                                                                                                                                     
|10.13   | Letter Agreement by and between Neil R. Gordon and Datameg Corporation dated September 22, 2005 (8) (*)                                                             
|        |                                                                                                                                                                     
|10.14   | Option Agreement by and between Neil R. Gordon and Datameg Corporation dated September 22, 2005 (8) (*)                                                             
|        |                                                                                                                                                                     
|10.15   | Employment Agreement between Dan Ference and QoVox Corporation, dated August 19, 2005.(3) (*)                                                                       
|        |                                                                                                                                                                     
|10.16   | Settlement Agreement and Mutual Release, dated as of February 12, 2004, by and between Datameg NY and Rex Hestor.(9) (*)                                            
|        |                                                                                                                                                                     
|10.17   | Option Agreement by and between Datameg NY and Rex Hestor, dated as of January 2004.(3) (*)                                                                         
|        |                                                                                                                                                                     
|10.18   | Stock Lock-up Agreement by and between Datameg NY and Rex Hestor, dated as of January 2004.(9) (*)                                                                  
|        |                                                                                                                                                                     
|10.19   | Letter Agreement by and between Joshua E. Davidson and Datameg Corporation, dated as of July 1, 2005.(10) (*)                                                       
|        |                                                                                                                                                                     
|10.20   | Option Agreement between Datameg Corporation and Joshua E. Davidson, dated as of July 25, 2005.(7) (*)                                                              
|        |                                                                                                                                                                     
|10.21   | Agreement dated as of March 22, 2005, by and between Datameg NY and Kanti Purohit.(6) (*)                                                                           
|        |                                                                                                                                                                     
|10.22   | Agreement and Settlement, dated as of March 22, 2005, by and between Datameg NY and Kanti Purohit.(6) (*)                                                           
|        |                                                                                                                                                                     
|10.23   | Consulting Agreement, dated as of July 1, 2004, by and between Datameg NY and James Murphy.(4) (*)                                                                  
|        |                                                                                                                                                                     
|10.24   | Option Agreement, dated January 1, 2004, by and between Datameg NY and Andrew Benson.(9) (*)                                                                        
|        |                                                                                                                                                                     
|10.25   | Option Agreement between Datameg NY and Andrew Benson, dated April 17, 2005.(1) (*)                                                                                 
|        |                                                                                                                                                                     
|10.26   | Mutual General Release between Andrew Benson and Datameg NY dated April 27, 2005.(1) (*)                                                                            
|        |                                                                                                                                                                     
|10.27   | Resignation by Andrew Benson from directorship of Datameg Corporation, a Delaware corporation, dated April 29, 2005.(1) (*)                                         
|        |                                                                                                                                                                     
|10.28   | Consulting Agreement between Datameg Corporation, a Delaware corporation, and Andrew Benson, dated as of May 1, 2005.(1) (*)                                        
|        |                                                                                                                                                                     
|10.29   | Resignation by William J. Mortimer as General Manager of QoVox, Inc.(11)                                                                                            
|        |                                                                                                                                                                     
|10.30   | Appointment of James Murphy as its Chief Executive Officer, President and Chairman of the Board of Directors.(12)                                                   
|        |                                                                                                                                                                     
|10.31   | Appointment of Lehman Bros. Managing Director John T. Grady Jr. to Board of Directors.(13)                                                                          
|        |                                                                                                                                                                     
|10.32   | Appointment of Bob Nelson as Vice President, Worldwide Sales, for QoVox.(14)                                                                                        
|        |                                                                                                                                                                     
|10.33   | Appointment of Michael West as Senior Vice President, National Accounts, for QoVox.(15)                                                                             
|        |                                                                                                                                                                     
|10.34   | Benson And Gordon Compensation Amendments.(16)                                                                                                                      
|        |                                                                                                                                                                     
|10.35   | Director Mark P. McGrath resignation. (17)                                                                                                                          
|        |                                                                                                                                                                     
|10.36   | Investment banker Byron J. Collier appointed to the Advisory Board (18)                                                                                             
|        |                                                                                                                                                                     
|10.37   | Director William J. Mortimer receives 2 million Datameg common shares, returns 10 million under RSA (19)                                                            
|        |                                                                                                                                                                     
|10.38   | Benson Amendment And Utah Move (20)                                                                                                                                 
|        |                                                                                                                                                                     
|10.39   | Former Director and Chief Executive Mark P. McGrath canceled his option agreement for 10 million shares. (21)                                                       
|        |                                                                                                                                                                     
|10.40   | Changes in Registrants Certifying Accountant (22)                                                                                                                  
|        |                                                                                                                                                                     
|10.41   | QoVox received its 4th purchase order from the Time Warner Cable Raleigh Division. (23)                                                                             
|        |                                                                                                                                                                     
|10.42   | Patrick J. Glennon was appointed to the Companys advisory board. (24)                                                                                              
|        |                                                                                                                                                                     
|10.43   | Dr. Jim DeCoste was appointed to the Companys advisory board. (25)                                                                                                 
|        |                                                                                                                                                                     
|10.44   | Ragusa consulting services retained as Chief Marketing Officer for QoVox.(26)                                                                                       
|        |                                                                                                                                                                     
|10.45   | FeatureTel enters 60 day trial of QoVox product. (27)                                                                                                               
|        |                                                                                                                                                                     
|10.46   | Lingle and Stewart become President and Chief Techology Officer of QoVox. (28)                                                                                      
|        |                                                                                                                                                                     
|10.47   | Shireman becomes VP Sales of QoVox. (29)                                                                                                                            
|        |                                                                                                                                                                     
|10.48   | Non-Reliance on Previously Filed Audited Report (30)                                                                                                                
|        |                                                                                                                                                                     
|10.49   | Amendment to Notice of Non-Reliance on Previously Filed Audited Report (31)                                                                                         
|        |                                                                                                                                                                     
|10.50   | Entry into a Material Definitive Agreement to Acquire Computer Ctr.Com, Inc.(32)                                                                                    
|        |                                                                                                                                                                     
|10.51   | Appointment of Winthrop Sargent as contracted Vice President of Finance. (33)                                                                                       
|        |                                                                                                                                                                     
|10.52   | Announcement of acquisition of American Marketing & Sales, Inc. (34)                                                                                                
|        |                                                                                                                                                                     
|10.53   | Announcement of completion of field audits for American Marketing & Sales, Inc. and Computer Center.Com (35)                                                        
|        |                                                                                                                                                                     
|10.54   | Announcement of closing of American Marketing & Sales, Inc. acquisition (36)                                                                                        
|        |                                                                                                                                                                     
|10.55   | Announcement of American Marketing & Sales, Inc. financial statements (37)                                                                                          
|        |                                                                                                                                                                     
|10.56   | Announcement of Commencement of Maestro Product Sales by NetSymphony (38)                                                                                           
|        |                                                                                                                                                                     
|10.57   | Announcement of First Sale by NetSymphony of Maestro product sales. (39)                                                                                            
|        |                                                                                                                                                                     
|10.58   | Announcement by American Marketing & Sales, Inc. of stake in JAM Plastics. (40)                                                                                     
|        |                                                                                                                                                                     
|10.59   | Announcement by NetSymphony of Sales Agent Agreement with Acorn Technologies (41)                                                                                   
|        |                                                                                                                                                                     
|10.60   | Announcement by American Marketing & Sales, Inc (AMS) of Greenline Products (42)                                                                                    
|        |                                                                                                                                                                     
|10.61   | AMS announces two new distributors for caterware (43)                                                                                                               
|        |                                                                                                                                                                     
|10.62   | AMS books $555,000 and test order (44)                                                                                                                              
|        |                                                                                                                                                                     
|10.63   | AMS announces Balducci's as new customer (45)                                                                                                                       
|        |                                                                                                                                                                     
|10.64   | AMS announces Madison Square Garden as new customer (46)                                                                                                            
|        |                                                                                                                                                                     
|10.65   | Datameg announced resignation of Director John Grady (47)                                                                                                           
|        |                                                                                                                                                                     
|10.66   | NetSymphony announces significant customer test (48)                                                                                                                
|        |                                                                                                                                                                     
|10.67   | Datameg announces marketing contract with Mirielle Abi Nader agency (49)                                                                                            
|        |                                                                                                                                                                     
|10.68   | Datameg announces election of Director Gerald Bellis (50)                                                                                                           
|        |                                                                                                                                                                     
|10.69   | American Marketing announces Green Plastics Web Site (51)                                                                                                           
|        |                                                                                                                                                                     
|10.70   | American Market announces new customer Le Pain Quotidien (52)                                                                                                       
|        |                                                                                                                                                                     
|10.71   | American Market announces new customer U.S. Food Service (53)                                                                                                       
|        |                                                                                                                                                                     
|10.72   | American Market announces new customer Finagle a Bagel (54)                                                                                                         
|        |                                                                                                                                                                     
|10.73   | Datameg announces entry in material agreement to sell American Marketing (55)                                                                                       
|        |                                                                                                                                                                     
|21.10   | Subsidiaries of the Registrant.(3)                                                                                                                                  
|        |                                                                                                                                                                     
|99.10   | Exhibit of Unregistered Sales of Securities.(7)                                                                                                                     
|        |                                                                                                                                                                     
|99.20   | Press Release dated September 1, 2005.(3)                                                                                                                           
|        | Footnotes to Exhibits                                                                                                                                               
|(1)     | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on May 4, 2005.                                                            
|(2)     | Incorporated by reference to the Form SB-2/A filed by Datameg NY on June 14, 2004.                                                                                  
|(3)     | Incorporated by reference to the Form SB-2 filed by Datameg Corporation on September 1, 2005.                                                                       
|(4)     | Incorporated by reference to the Quarterly Report on Form 10-QSB/A filed by Datameg NY on November 26, 2004.                                                        
|(5)     | Incorporated by reference to the Annual Report on Form 10-KSB filed by Datameg NY on April 14, 2004.                                                                
|(6)     | Incorporated by reference to the Annual Report on Form 10-KSB/A filed by Datameg NY on April 20, 2005.                                                              
|(7)     | Incorporated by reference to the Quarterly Report on Form 10-QSB/A filed by Datameg Corporation on August 29, 2005.                                                 
|(8)     | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 22, 2005.                                                     
|(9)     | Incorporated by reference to the Form SB-2/A filed by Datameg NY on February 27, 2004.                                                                              
|(10)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 26, 2005.                                                          
|(11)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on December 14, 2005.                                                      
|(12)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on January 17, 2006.                                                       
|(13)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on February 23, 2006.                                                      
|(14)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 1, 2006.                                                          
|(15)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 14, 2006.                                                         
|(16)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on April 20, 2006.                                                         
|(17)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on June 7, 2006.                                                           
|(18)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 12, 2006.                                                          
|(19)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 14, 2006.                                                          
|(20)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 31, 2006.                                                          
|(21)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on August 4, 2006                                                          
|(22)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on August 7, 2006                                                          
|(23)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 5, 2006                                                       
|(24)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 19, 2006                                                      
|(25)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 26, 2006                                                      
|(26)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on November 17, 2006                                                       
|(27)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on December 20, 2006                                                       
|(28)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on January 24, 2007                                                        
|(29)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on February 15, 2007                                                       
|(30)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on April 18, 2007                                                          
|(31)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on May 24, 2007                                                            
|(32)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on June 14, 2007                                                           
|(33)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on August 8, 2007                                                          
|(34)    | Incorporated by reference to the Current Report on Form 8-Kfiled by Datameg Corporation on August 17, 2007                                                          
|(35)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on October 31, 2007                                                        
|(36)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on December 13, 2007                                                       
|(37)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on January 24, 2008                                                        
|(38)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on February 21, 2008                                                       
|(39)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 5, 2008                                                           
|(40)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 12, 2008                                                          
|(41)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 19, 2008                                                          
|(42)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 26, 2008                                                          
|(43)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on May 16, 2008                                                            
|(44)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on May 23, 2008                                                            
|(45)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 1, 2008                                                            
|(46)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on July 2, 2008                                                            
|(47)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on August 29, 2008                                                         
|(48)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 3, 2008                                                       
|(49)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 9, 2008                                                       
|(50)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on September 15, 2008                                                      
|(51)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on December 31, 2008                                                       
|(52)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on February 20, 2009                                                       
|(53)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 6, 2009                                                           
|(54)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on March 6, 2009                                                           
|(55)    | Incorporated by reference to the Current Report on Form 8-K filed by Datameg Corporation on April 2, 2009                                                           
|(*)     | Management contract or compensatory plan.                                                                                                                           

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 on this 16thday of April 2009.





|                    |  |                                                
|------------------- |  | -----------------------------------------------
|Datameg Corporation
|                    | 
|BY:                 |  | /s/    James Murphy                            
|                    |  | James Murphy,                                  
|                    |  | Chairman, President and Chief Executive Officer





Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, James Murphy, certify that:

1. I have reviewed this quarterly report on Form 10-K of Datameg Corporation for the twelve months ended December 31, 2008;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;

c) evaluated the effectiveness of the small business issuers disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the small business issuers internal control over financial reporting that occurred during the small business issuers most recent fiscal quarter (the small business issuers fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuers internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuers internal control over financial reporting.



|By:   |  | /s/ JAMES MURPHY                      | 
|----- |  | ------------------------------------- | 
|      |  | James Murphy, Chief Executive Officer | 
|Date: |  | April 16, 2008                        | 







Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Datameg Corporation, a Delaware corporation (the "Company"), on Form 10-K for the twelve months ending December 31, 2008, as filed with the Securities and Exchange Commission (the "Report"), I, James Murphy, Chairman and Principal Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



|By:   |  | /s/ JAMES MURPHY                      | 
|----- |  | ------------------------------------- | 
|      |  | James Murphy, Chief Executive Officer | 
|Date: |  | April 16, 2008                        | 



End of Filing