UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, DC 20549  FORM 10-K  [X] ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended December 31,
2010  [
  ] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from
  to
.  Commission File No. 000-29397  MONTAVO, Inc. (Exact Name of Registrant as Specified in
Its Charter)  Delaware
33-0619528(State or Other Jurisdiction of
 Incorporation or Organization)
(I.R.S. Employer Identification
No.)   4957 Lakemont Blvd., Suite 239 Bellevue, Washington 98006 (Address of Principal Executive
Offices)  (425) 474-5500 (Registrants Telephone Number, Including
Area Code)  Securities registered under Section 12(b) of
the Exchange Act:  None.  Securities
registered under Section 12(g) of the Exchange Act:  Common Stock, Par
Value $0.001.   Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes
  o  No x  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
 o   No x  Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes  x No  o  Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files. Yes o No o       Indicate by check mark 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 the definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
 (Check One):  Large accelerated filer o Accelerated
filer o Non-accelerated filer o Smaller
reporting company x  Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act). Yes o No x  On April 15, 2011, 71,282,241 shares of the registrants
common stock were outstanding.  The aggregate market value of the registrants voting
stock held by non-affiliates of the registrant was approximately $1,127,500 as
of June 30, 2010.  Shares of voting stock held by each executive officer
and director of the registrant and each person who beneficially owns 10% or more
of the registrants outstanding voting stock has been excluded from the
calculation.  This determination of affiliated status may not be conclusive
for other purposes.       Table of Contents FORWARD-LOOKING
STATEMENTS 1 ITEM
1.  BUSINESS 1 ITEM
1B.  UNRESOLVED STAFF COMMENTS 5 ITEM
2.  PROPERTIES 5 ITEM
3.  LEGAL PROCEEDINGS 5 PART
II 6 ITEM
5.  MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES6 ITEM
7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS8 ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 14 ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.41 ITEM
9A.  CONTROLS AND PROCEDURES 41 ITEM
9B.  OTHER INFORMATION 44 Part
III 44 ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 44 ITEM
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS48 ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE49 ITEM
14.   PRINCIPAL ACCOUNTING FEES AND SERVICES 49 PART
IV 50 ITEM
15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. 50 SIGNATURES 52              FORWARD-LOOKING STATEMENTS  This Annual Report on Form 10-K and
the documents incorporated herein by reference, if any, contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, an
amended (the Securities Act), and Section 21E of the Securities Exchange Act
of 1934, as amended (the Exchange Act). These forward-looking statements
reflect our current views with respect to future events or our financial
performance, and involve certain known and unknown risks, uncertainties and
other factors, including those identified below, which may cause our or our
industrys actual or future results, levels of activity, performance or
achievements to differ materially from those expressed or implied by any
forward-looking statements or from historical results. We intend such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
 Forward-looking statements include information concerning our possible or
assumed future results of operations and statements preceded by, followed by, or
that include the words may, will, could, would, should, believe,
expect, plan, anticipate, intend, estimate, predict, potential or
similar expressions.  Forward-looking statements are
inherently subject to risks and uncertainties, many of which we cannot predict
with accuracy and some of which we might not even anticipate.  Although we
believe that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions at the time made, we can give no assurance
that such expectations will be achieved.  Future events and actual results,
financial and otherwise, may differ materially from the results discussed in the
forward-looking statements.  Readers are cautioned not to place undue
reliance on these forward-looking statements.  We have no duty to update,
supplement or revise any forward-looking statements after the date of this
report or to conform them to actual results, new information, future events or
otherwise.  The following factors, among others,
could cause our or our industrys future results to differ materially from
historical results or those anticipated:  (1) the availability of
additional funds to enable us to successfully pursue our business plan; (2) the
uncertainties related to the appeal and acceptance of our planned products and
service offerings; (3) the success or failure of our development of additional
products and services; (4) our ability to maintain, attract and integrate
management personnel; (5) our ability to secure suitable advertising inventory
partners; (6) our ability to effectively market and sell our services to new
customers; (7) changes in the rules and regulations governing our business; (8)
the intensity of competition; and (9) general economic conditions.  As a
result of these and other factors, we may experience material fluctuations in
future operating results on a quarterly or annual basis, which could materially
and adversely affect our business, financial condition, operating results and
stock price.   ITEM 1.
 BUSINESS  Overview  We are deploying an advanced mobile
marketing and advertising solution.  The Montavo Mobile Ad Platform (mMAP)
offers advertisers the unique opportunity to review a mobile ad spend vs. gross
profit ratio which generates a Return on Investment (ROI) of their mobile
advertising costs.  The ratio is displayed on the Montavo Mobile Ad Spend
Speedometer, which is a real-time online dashboard reporting tool that allows
advertisers to monitor the performance of mobile advertising campaigns that are
deployed on the mMAP.  The mMAP, with our patent pending
technology, can anonymously report to an advertiser that a consumer who merely
viewed a mobile ad on their cell phone (through any of several different ways
the mMAP places advertising on the mobile phone in both push and pull-type
ads), subsequently went into a physical location store and purchased products
and/or services.  This means Montavo can give an advertiser an ROI measure
on their mobile advertising costs related to in-store purchases, representing a
benefit that is not offered by traditional      advertising mediums
today.  The mMAP does this without any additional hardware or software or
Point of Sale (POS) system, and no additional interaction is needed between
store associates and consumers or their mobile phones.  We expect that our core revenues will
be derived from advertisers, who will be charged impression views and/or monthly
fees for inclusion in our permission-based database, from impressions,
click-through and redemption fees for the redemption of incentives, or from fees
for the development of national campaigns for brand advertisers. We plan to seek
distribution agreements with advertisement campaign aggregators, including
global advertising agencies, search-engine marketing optimization agencies,
membership organizations and direct marketing organizations.  We also
intend to employ a small team of account executives that will act as a sales
force and seek and solicit clients among national and regional brand leaders.
There can be no assurance that we will achieve our objectives or succeed in our
business plan.  We have prepared our financial
statements assuming that we will continue as a going concern, which contemplates
realization of assets and the satisfaction of liabilities in the normal course
of business.  As of December 31, 2010, we had a deficit accumulated during
the development stage of approximately $5.3 million, negative cash flows from
operations since inception and expect to incur additional losses in the future
as we continue to develop and grow our business.  We have funded our losses
primarily through sales of common stock and warrants in private placements and
borrowings from related parties and other investors.  The further
development of our business will require capital.  At December 31, 2010, we
had a working capital deficit (current assets less current liabilities) of
approximately $1.5 million and no cash.  We are dependent on external sources
of financing to meet our working capital needs.  Current sources of
liquidity are insufficient to provide for budgeted and anticipated working
capital requirements.  We will therefore be required to seek additional
financing to satisfy our working capital requirements.  No assurances can
be given that such capital will be available to us on acceptable terms, if at
all.  In addition to equity financing and strategic investments, we may
seek additional related party loans.  If we are unable to obtain any such
additional financing, or if such financing cannot be obtained on terms
acceptable to us, we may be required to delay or scale back our operations,
including the development of our mobile marketing solution, which would
adversely affect our ability to generate future revenues and may force us to
curtail or cease our operating activities.  To attain profitable operations,
managements plan is to execute its strategy of (i) continuing the development
of our proprietary mobile marketing solution; (ii) building additional strategic
partnerships with technology partners; (iii) building strategic partnerships
with premier advertising inventory partners; and (iv) executing sales
relationships with national and global brands in order to drive profitability.
 We will continue to be dependent on outside capital to fund our operations
for the foreseeable future, and continue to be involved in discussions and
negotiations with investors in order to raise additional funds to provide
sufficient working capital for operations with a near-term goal of generating
positive cash flow from operations.  Any financing we obtain may further
dilute or otherwise impair the ownership interest of our current stockholders.
 If we fail to generate positive cash flows or fail to obtain additional
capital when required, we could modify, delay or abandon some or all of our
plans.  These factors, among others, raise substantial doubt about our
ability to continue as a going concern.  Our financial statements do not
include any adjustments that might result from the outcome of this uncertainty.  Our principal executive offices are
located at 4957 Lakemont Blvd, Suite 239, Bellevue, Washington 98006, and our
telephone number at that address is (425) 747-5500.  We maintain an
Internet website at www.montavo.com.  Information on our website is not
part of this Annual Report.  Principal Products and Markets  Our  Montavo Mobile Shopping
consumer client application can be used on mobile phones and other personal
mobile devices, personal navigation devices and factory-installed in-dash
automobile navigation systems.  The application enables end-user consumers
on the go to access and find offers, including sales, discounts, coupons,
product information and new product launches, from their mobile wireless
devices.  Our advertisement delivery platform mMAP is also used as an ad
delivery network to mobile websites and mobile applications.       Our Montavo Mobile Shopping end-user
client application will be marketed to wireless carriers, handset manufacturers,
personal and vehicle navigation device manufacturers and application
aggregators, by a small team of dedicated account executives.  The
advertising media will be marketed to global advertising agencies, search engine
market optimization agencies, membership organizations and direct marketing
organizations, as well as national and regional brand leaders.   Growth Strategy  We have developed technology that is
incorporated into our Montavo Mobile Advertising Platform (mMAP), which allows
wireless subscribers to search a proprietary advertisement delivery system by
category of service, keyword search and location.  This application can
simultaneously generate ROI (return on investment) ratios on revenue and profit
for the advertiser.  The content is delivered to subscribers via mobile
handsets and other personal mobile wireless devises as well as personal
navigation devices or in-dash navigation systems installed in vehicles.
 Subscribers can download and view advertisements, redeem special
incentives and obtain turn-by-turn directions to the nearest retail location.  We expect that our core revenues will
be derived from advertisers, who will pay fees for inclusion in our mMAP, from
click-through pull ads as well as opt-in push ads, and custom development of
mobile applications and mobile websites.  We plan to seek distribution
agreements with advertisement campaign aggregators, including global advertising
agencies, search-engine marketing optimization agencies, membership
organizations and direct marketing organizations.  We also intend to employ
a small team of account executives that will act as a sales force and seek and
solicit clients among global, national and regional brand leaders.  Competition  There is substantial competition in
the mobile marketing industry, including competition from well-established
providers such as MSN, Google, Apple, and Yahoo, and competition from smaller
providers that focus specifically on the mobile environment, such as  Jump
Tap, Cellfire and ShopSavvy.  Google, through its purchase of Admob, runs a
network of mobile web sites that display mobile banner advertisements generated
by Googles advertising engine.  Jump Tap is a search engine designed for
the mobile environment, which allows users to search the Internet using mobile
phones instead of personal computers.  Cellfire is a mobile coupon
distributor, which allows advertisers to develop and publish mobile coupons
through mobile phones.  ShopSavvy is a mobile application that allows
mobile users to search for deals on their cell phone.  Currently, we know
of no other competitor that has a similar product to the mMAP and the
patent-pending technology that can deliver an ROI on sales, revenue and profits
for the advertiser.  This technology would provide data for physical store
locations and the advertiser without requiring a change in normal business
development and advertisements for potential customers.  Sales and Marketing  We expect to hire a small team of
experienced sales executives with prior relationships and experience in each of
our market sectors both domestic and internally (such as advertising agencies,
retailers and brand name manufacturers), to expand upon our existing
relationships.  We anticipate that their compensation structures will
consist of base salaries with incentive commission payments.  We expect
that our account executives will be attending various trade shows and
conventions including, but not limited to, those held by the Mobile Marketing
Association and the National Restaurants Association.  Regulation  We are unaware of and do not
anticipate having to expand significant resources to comply with any
governmental regulations of the mobile marketing industry.  We are not
currently subject to direct federal, state or local regulation other than
regulations applicable to businesses generally or directly applicable to online
commerce.  However, it is possible that a number of laws and regulations
may be adopted with respect to our sales and      distribution channels.
 The adoption of additional laws could increase the difficulty of
conducting our business and reduce the demand for our products.  Research and Development  We are not engaged in any meaningful
research and development activities and we do not have a research and
development staff.  Intellectual Property  We create, own and distribute
intellectual property.  It is our practice to protect our technology
through patents, trademarks, copyrights, trade secret laws, restrictions on
disclosure and other methods.  We filed a U.S. utility patent application (Application
No. 11/053,095) for the invention, entitled Method and Distribution System for
Location Based Wireless Presentation of Electronic Coupons with respect to our
unique wireless delivery technology.  The patent application is currently
pending. We also filed a U.S. utility patent application (Application No.
12/702,250) for the invention, entitled System and Method of Delivering Ads
with respect to our proprietary system and method for confirming sales revenue
and profits in a physical store from mobile advertisements.  We have a registered trademark for the
name Montavo and its related logo.  We have applied for registration for
the following marks: Spend Speedometer, mDeal-Finder and mMap.  We have no foreign patents or other
foreign trademarks.  Prior to expanding our services into foreign markets,
we plan to take measures to protect our intellectual property in such markets.  Our primary Internet domain is
montavo.com.  We also rely on trade secrets,
know-how and other unpatented proprietary information in our business.
 Most of our consultants and contractors are required to enter into
confidentiality and non-competition agreements.  However, there is no
assurance that these agreements would be enforceable if they are breached or, if
enforced, that they would adequately protect us or provide an adequate remedy
for the damages that may be caused by such a breach.  Industry Overview  The internets development into a
significant global medium for communication, content and commerce has led to
substantial growth in online shopping for goods and services.  As use of
the internet to research and purchase products and services increases,
businesses are seeking ways to more effectively reach consumers online. As a
result, both online and traditional retail businesses are increasingly using the
internet to advertise their products and services.  The
advertising industry, and specifically online advertising, is evolving to meet
the increasing online demands of both consumers and businesses.  Seasonality  Both seasonal fluctuations in internet
usage and traditional retail seasonality can affect our business.  Internet
usage generally slows during the summer months, and commercial queries typically
increase significantly in the fourth quarter of each year. These seasonal trends
could cause fluctuations in our quarterly results, including fluctuations in
sequential revenues, as well as paid click and average cost-per-click growth
rates.        Employees  As of December 31, 2010, we had no
employees but were utilizing the services of independent contractors and
consultants.  Development of Business  We were incorporated under the laws of
the State of Delaware on April 20, 1994.  From incorporation until December
13, 2004, we had no operating history other than organizational matters.
 On December 13, 2004, we acquired all of the issued and outstanding shares
of Trans Media Inc., a Wyoming corporation engaged in the production and
distribution of musical compact discs and musical performances.  Through
Trans Media, we engaged in the production and distribution of compact discs and
musical performances targeted to the South Asian immigrant population in North
America, and to date completed the production of eight compact discs.  In November 2007, we engaged in a new
line of business, in the mobile communications industry, with the objective of
becoming a mobile enabler and identifying, deploying and commercializing
innovative mobile applications and technologies to offer targeted brand
messaging.  Business of Predecessor  Trans Media, in which we acquired a
100% interest on December 13, 2004, was formed in 2004.  As indicated
above, Trans Media was engaged in the production and distribution of musical
compact discs and musical performances.  Since Trans Media was considered
to be the acquirer for financial reporting purposes, our historical financial
statements for any period prior to December 13, 2004, are those of Trans
Media.   ITEM 1B.  UNRESOLVED STAFF
COMMENTS  None.     ITEM 2. 
PROPERTIES  We do not own any real property.
 We have offices at 4957 Lakemont Blvd., Suite #239, Bellevue, Washington
98006.  We are also provided space in Seattle, Washington at no cost by a
strategic advisor.   ITEM 3.  LEGAL
PROCEEDINGS   As previously reported in our Annual
Report on Form 10-K, filed with the Commission on April 15, 2010, we are
involved in one legal action.  In August 2009, Robert Half International
sued us claiming unpaid fees for services rendered.  On February 24, 2010,
a judgment was granted against us in the amount of $87,248.91, which amount
bears interest at 12% per annum.  We have included the judgment, net of
payment of approximately $15,000, in accounts payable at December 31, 2010, and
of approximately $87,000 at December 31, 2009.  On June 24, 2010, we
entered into a settlement and forbearance agreement with Robert Half
International, whereby Robert Half International agreed not to pursue the
judgment against us as long as we continued to make payments as follows:
 on August 1, 2010, $10,000; and $10,000 thereafter on the first day of
every month until the amount of $74,000 is paid in full.  We did not make
the payments according to the schedule, and the entire amount, plus accrued
interest, is immediately due and payable.  As of December 31, 2010, we were
not a party to any other pending legal proceeding and were not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.          PART II     ITEM 5.  MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES  Our common stock became eligible for
trading on the Over-The-Counter Bulletin Board on December 19, 2007, having the
trading symbol MTVO.  As of December 31, 2010, we had 71,117,241 shares
issued and outstanding.  The following table reflects the high
and low quarterly bid prices for the fiscal year ended December 31, 2010 and
2009.  Period
High Bid
Low Bid1st Quarter 2009 ended 3/31/09
$0.60
$0.182nd Quarter 2009 ended 6/30/09
$0.26
$0.113rd Quarter 2009 ended 9/30/09
$0.19
$0.064th Quarter 2009 ended 12/31/09
$0.21
$0.041st Quarter 2010ended 3/31/10
$0.09
$0.022nd Quarter  2010 ended
6/30/10
$0.03
$0.013rd Quarter 2010 ended 9/30/10
$0.04
$0.014th Quarter  2010 ended
12/31/10
$0.02
$0.01  These quotations may reflect
inter-dealer prices without retail mark-up/mark-down/commissions and may not
reflect actual transactions.  We have authorized 400,000,000 shares
of common stock and 25,000,000 shares of preferred stock, par value $.001. As of
March 31, 2011, we had approximately 180 stockholders of record.  Dividends  We have never declared or paid any
cash dividends on our common stock nor do we anticipate paying any in the
foreseeable future.  Furthermore, we expect to retain any future earnings
to finance our operations and expansion.  The payment of cash dividends in
the future will be at the discretion of our board of directors and will depend
upon our earnings levels, capital requirements, any restrictive loan covenants
and other factors our board of directors considers relevant.  Equity Compensation Plans  In 2005, we adopted the 2005 Stock
Option Plan (the 2005 Plan).  The 2005 Plan provided for the granting of
stock options to employees and consultants for services.  Options granted
under the 2005 Plan may be either incentive stock options or nonqualified stock
options.  Incentive stock options (ISO) may be granted only to employees
(including officers and directors who are also employees).  Nonqualified
stock options (NSO) may be granted to employees and consultants.  We
reserved 1,000,000 shares of common stock for issuance under the 2005 Plan.  In 2009, we adopted the 2009 Stock
Incentive Plan for Employees and Consultants (the 2009 Plan).  The 2009
Plan provided for the granting of stock options to employees and consultants for
services rendered to the Company.  Options granted under the 2009 Plan may
be either incentive stock options or nonqualified stock options.  Incentive
stock options (ISO) may be granted only to employees or consultants (including
officers and directors who are also employees).  Nonqualified stock options
may be granted to employees and consultants.  Under the 2009 Plan, up to
6,000,000 shares of our common stock may be issued to directors, employees or
consultants pursuant to share awards or options to purchase our common stock.
 We filed a form S-8 on June 12, 2009 to      register the shares of common
stock issuable under the 2009 Plan.  On February 11, 2010, we amended our
2009 Plan and filed a revised Form S-8 increasing the number of reserved shares
to 15,000,000.  On May 7, 2010, we again amended our 2009 Plan and filed a
subsequent revision to the Form S-8, increasing the number of reserved shares to
35,000,000.  Recent Sales of Unregistered Securities; Use of
Proceeds from Registered Securities  In December 2010, we entered into a
convertible promissory note with the same holder in the aggregate amount of
$25,000 together with two-year warrants to purchase 1,875,000 shares of our
common stock at an exercise price of $0.02 per share, whereby we received
$20,000 in cash and an April promissory note for $3,000, an August $1,000
promissory note and $1,000 in accounts payable to the same party were settled.
 The December 2010 promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement.  In October 2010, we transferred
$25,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $25,000 at a stated
interest rate of 12%, together with two-year warrants to purchase 1,875,000
shares of our common stock at an exercise price of $0.02 per share. The
promissory note is due within one year.   Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory notes contain an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holders may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement.  In October and December 2010, we
entered into convertible promissory notes in the aggregate amount of $37,500
together with two-year warrants to purchase 2,812,500 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
notes contain an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holders may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement.  In February 2011, we entered into a
convertible promissory note in the amount of $25,000 together with two-year
warrants to purchase 1,875,000 shares of our common stock at an exercise price
of $0.02 per share.  The promissory note bears interest at a rate of 12%
per annum, and the note is due in one year.  Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $950,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $750,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.  In March 2011, we entered into a
convertible promissory note in the amount of $5,000 together with two-year
warrants to purchase 375,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is      18%.  As the Company is
currently seeking to raise financing under a private placement transaction, the
promissory note contains an optional conversion clause whereby, during a 30-day
period after the completion of such private placement transaction raising in
excess of $250,000, the holder may either convert the promissory note at the
share price of such private placement transaction or demand repayment out of the
proceeds of such financing.  Under the terms of the promissory note
agreement, if the share price of the first $250,000 of such private placement is
below $0.02 (the strike price of the warrants), the strike price of the warrants
will be downward adjusted to such share price of the private placement.  In March and April 2011, we issued
fully vested five-year warrants to purchase an aggregate of 840,000 shares of
our common stock at an exercise price of $0.001 per share for financial and
advisory services to a consultant.  In April 2011, we entered into a
convertible promissory note in the amount of $10,000 together with two-year
warrants to purchase 750,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $250,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.  Purchases of equity securities by the issuer and
affiliated purchasers  None.   ITEM 7. 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS  Overview  The following managements discussion
and analysis of our financial condition and results of operations is intended to
provide information necessary to understand our audited consolidated financial
statements and highlight certain other information which, in the opinion of
management, will enhance a readers understanding of our financial condition,
changes in financial condition and results of operations.  In particular,
the discussion is intended to provide an analysis of significant trends and
material changes in our financial position and operating results of our business
during the year ended December 31, 2010, as compared to the year ended December
31, 2009.  The following discussion and analysis should be read in
conjunction with our consolidated financial statements and notes appearing
elsewhere in this Report.  This Item is organized as follows:  · The section entitled Background
describes our principal operational activities and summarizes significant trends
and developments in our business and in our industry.  · Recent Developments discusses
certain management changes and significant recent contractual agreements.  · Critical Accounting Policies and
Estimates and Recent Accounting Pronouncements discusses our most critical
accounting policies and new accounting standards.  · Liquidity, Capital Resources and
Going Concern discusses our cash requirements, sources and uses of cash and
liquidity, including going concern qualifications.      · Consolidated Results of Operations
discusses the primary factors that are likely to contribute to significant
variability of our results of operations for the year ended December 31, 2010,
as compared to the year ended December 31, 2009.  · Off-Balance Sheet Arrangements
indicates that we did not have any off-balance sheet arrangements as of December
31, 2010. In addition, Item 9A, Controls
and Procedures, contains managements assessment of our internal controls over
financial reporting as of December 31, 2010.  Background  We were incorporated under the laws of
the State of Delaware on April 20, 1994. From our incorporation and until
December 13, 2004, we had no operating history other than organizational
matters. On December 13, 2004, we acquired all of the issued and outstanding
capital stock of Trans Media Inc. (Trans Media), a Wyoming corporation.
 The acquisition was consummated pursuant to a Plan of Arrangement and
Share Exchange Agreement, dated September 29, 2004, whereby Trans Media became
our wholly owned subsidiary.  This transaction is commonly referred to as a
reverse acquisition, in which all of the outstanding capital stock of Trans
Media was effectively exchanged for a controlling interest in our stock.
 This type of transaction is considered to be a recapitalization rather
than a business combination.  Accordingly, for accounting purposes, no
goodwill or other intangible assets were recorded.  On May 7, 2008, Trans Media, its
wholly owned subsidiary North Coast Acquisition Corp., a Delaware corporation
(Acquisition Corp.), and Montavo, Inc., a privately-held Washington
corporation (Montavo), executed an Agreement (the Merger Agreement).
Pursuant to the terms of the Merger Agreement, on August 29, 2008, Acquisition
Corp. was merged with and into Montavo, with Montavo being the surviving entity
as a wholly owned subsidiary, and all of the issued and outstanding common stock
of Montavo was exchanged for newly-issued, restricted shares of common stock.
 The merger was accounted for as a reverse merger and recapitalization due
to Montavo having control of the board of directors and control of management at
the date of merger.  We are a development stage company in
the process of developing a mobile Location Based Services (LBS) marketing
solution for wireless carriers, mobile handset manufacturers, wireless
carrier/device software aggregators, personal navigation device (PND)
manufacturers, and vehicle manufacturers.  We have a patent pending filed
for our method and distribution system for location based wireless presentation
of electronic coupons technology.  Recent Developments  Management Changes  Effective September 13, 2010, Brian
Conte is no longer serving as the Companys Chief Development Officer.  Critical Accounting Policies and Estimates and
Recently Issued Accounting Standards  We prepare our
consolidated financial statements in conformity with accounting principles
generally accepted in the U.S.  As such, we are required to make certain
estimates, judgments and assumptions that we believe are reasonable based upon
the information available.  These estimates and assumptions affect the
reported amounts of assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses during the
periods presented.  Actual results could differ significantly from those
estimates under different assumptions and conditions.  We believe that the
following discussion addresses our most critical accounting estimates, which are
those that we believe are most important to the portrayal of our financial
condition and results of operations and which require our most difficult and
subjective judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain.  Other key estimates and
assumptions that affect      reported
amounts and disclosures include estimates as to valuation of share-based
payments and valuation allowance for deferred income tax assets.  We also
have other policies that we consider key accounting policies; however, these
policies do not meet the definition of critical accounting estimates because
they do not generally require us to make estimates or judgments that are
difficult or subjective. Derivatives
Embedded in Certain Debt Securities We evaluate financial instruments for
freestanding or embedded derivatives.  Derivative instruments that have
been separated from the host contract are recorded at fair value with changes in
value recognized as other income (expense) in the statements of operations in
the period of change. Income
taxes  We account for income taxes using an asset and liability method
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns.  Under this method, deferred income
taxes are recognized for the tax consequences in future years of differences
between the tax bases of assets and liabilities and their financial reporting
amounts at each period end based on enacted tax laws and statutory tax rates
applicable to the periods in which the differences are expected to affect
taxable income.  Valuation allowances are established, when necessary, to
reduce deferred tax assets to amounts expected to be realized.  The
provision for income taxes represents the tax payable for the period and change
during the period in net deferred tax assets and liabilities. We have
identified our federal tax return as our major tax jurisdiction, as defined.
 We do not believe any reserves for uncertain income tax positions are
required.  Our policy for recording interest and penalties associated with
uncertain income tax positions is to record such items as a component of
interest expense Debt Discounts Debt discounts
are being amortized through periodic charges to interest expense over the
maximum term of the related financial instrument using the effective interest
method.  Total amortization of debt discounts amounted to approximately
$58,000, $24,000 and $84,000 during the years ended December 31, 2010, 2009, and
the period from inception to December 31, 2010, respectively.  Share-Based PaymentsWe have
granted shares of our common stock and stock options and warrants to purchase
shares of our common stock to various parties for services and in connection
with financing activities.  The fair values of shares issued have been
based on closing market prices for periods after October 1, 2009, and at prices
of recent cash transactions for periods prior.  We use the Black-Scholes
option-pricing model as our method of valuation for share-based awards.
 Share-based compensation expense is based on the value of the portion of
the stock-based award that will vest during the period, adjusted for expected
forfeitures.  Our determination of the fair value of share-based awards on
the date of grant using an option pricing model is affected by our stock price
as well as assumptions regarding a number of highly complex and subjective
variables.  These variables include, but are not limited to, the expected
life of the award, expected stock price volatility over the term of the award
and historical and projected exercise behaviors.  The estimation of
share-based awards that will ultimately vest requires judgment, and to the
extent actual or updated results differ from our current estimates, such amounts
will be recorded in the period estimates are revised.  Although the fair
value of share-based awards is determined in accordance with authoritative
guidance, the Black-Scholes option pricing model requires the input of highly
subjective assumptions and other reasonable assumptions could provide differing
results.  Non-cash compensation expense is recognized on a straight-line
basis over the applicable vesting periods of one to five years (deemed to be the
service period), based on the fair value of such share-based awards on the grant
date.  Liquidity, Capital Resources and Going Concern  We have prepared our condensed financial statements
assuming that we will continue as a going concern, which contemplates
realization of assets and the satisfaction of liabilities in the normal course
of business.  As of December 31, 2010, we had a deficit accumulated in the
development stage of approximately $5.3 million, negative cash flows from
operations since inception and expect to incur additional losses in the future
as we continue to develop and grow our business.  We have funded our losses
primarily through sales of common stock and warrants in private placements and
borrowings from related parties and other investors.  The further
development of our business will require capital.  At December 31, 2010, we
had a working capital deficit (current assets less current liabilities) of $1.5
million and no cash.  Our operating expenses will consume a material amount
of our cash resources.      We are still in the early
stages of executing our business strategy.  Our current cash levels are not
sufficient to enable us to execute our business strategy.  We require
additional financing to execute our business strategy and to satisfy our
near-term working capital requirements.  In the event that we cannot obtain
additional funds, on a timely basis or our operations do not generate sufficient
cash flow, we may be forced to curtail or cease our activities, which would
likely result in the loss to investors of all or a substantial portion of their
investment.  We are actively seeking to raise additional capital through
the sale of shares of our capital stock to institutional investors and through
strategic investments.  If management deems necessary, we might also seek
additional loans from related parties.  However, there can be no assurance
that we will be able to consummate any of these transactions, or that these
transactions will be consummated on a timely basis or on terms favorable to
us.  Discussion of Cash Flows  We used cash of approximately $250,000, $198,000 and
$1,066,000 in our operating activities in the year ended December 31, 2010 and
2009 and the period from inception to December 31, 2010, respectively. Cash used
in operating activities relates primarily to funding net losses, partially
offset by share-based payments of consulting and other expenses. We expect to
use cash for operating activities in the foreseeable future as we continue our
operating activities.  Our investing activities used cash of approximately nil,
$8,000 and $45,000 in the year ended December 31, 2010 and 2009 and the period
from inception to December 31, 2010, respectively. Changes in cash from
investing activities are due to investment in patent.  We no longer
capitalize our patent expenditures.  Our financing activities provided cash
of approximately $250,000, $204,000 and $1,111,000 in the year ended December
31, 2010 and 2009 and the period from inception to December 31, 2010,
respectively.  Changes in cash from financing activities are proceeds from
related party advances, stockholder contributions to capital, proceeds from
issuance of common stock and warrants and proceeds from issuance of convertible
notes payable.  Recent Financing Activities  In December 2010, we entered into a
convertible promissory note with the same holder in the aggregate amount of
$25,000 together with two-year warrants to purchase 1,875,000 shares of our
common stock at an exercise price of $0.02 per share, whereby we received
$20,000 in cash and the April promissory note for $3,000, the August $1,000
promissory note and $1,000 in accounts payable to the same party were settled.
 The December 2010 promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement. In accordance with the authoritative guidance related to
instruments with down-round protection, we recorded a fair value liability of
approximately $25,000 at issuance.  The fair value liability is revalued
quarterly utilizing Black-Scholes valuation model computations with the increase
or decrease in fair value being reported in the statement of operations as other
income (expense). At December 31, 2010, the Black-Scholes assumptions utilized
were as follows:  stock price of $0.02, volatility of 162%, risk-free rate
of 0.61%, expected life of 2 years, dividend yield of 0.0%.  We recorded an
increase in the fair value liability of approximately $3,100 for the three
months ended December 31, 2010 as other expense.  In October 2010, we transferred
$25,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $25,000 at a stated
interest rate of 12%, together with two-year warrants to purchase 1,875,000
shares of our common stock at an exercise price of $0.02 per share. The
promissory note is due within one year.   Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory notes contain an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holders may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the      promissory note agreement, if
the share price of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement. In accordance with the authoritative
guidance related to instruments with down-round protection, we recorded a fair
value liability of $25,000 at issuance.  The fair value liability is
revalued quarterly utilizing Black-Scholes valuation model computations with the
increase or decrease in fair value being reported in the statement of operations
as other income (expense).  At December 31, 2010, the Black-Scholes
assumptions utilized were as follows:  stock price of $0.02, volatility of
162%, risk-free rate of 0.61%, expected life of 1.75 years, dividend yield of
0.0% and we recorded an increase in the fair value liability of approximately
$1,900 for the three months ended December 31, 2010 as other expense.  In October and December 2010, we
entered into convertible promissory notes in the aggregate amount of $37,500
together with two-year warrants to purchase 2,812,500 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
note contains an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holder may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement. In accordance with the authoritative
guidance related to instruments with down-round protection, we recorded a fair
value liability of $28,000 at issuance.  The fair value liability is
revalued quarterly utilizing Black-Scholes valuation model computations with the
increase or decrease in fair value being reported in the statement of operations
as other income (expense).  At December 31, 2010, the Black-Scholes
assumptions utilized were as follows:  stock price of $0.02, volatility of
162%, risk-free rate of 0.61%, expected life of 1.75 years, dividend yield of
0.0% and we recorded an increase in the fair value liability of approximately
$12,300 for the three months ended December 31, 2010 as other expense.  In February 2011, we entered into a
convertible promissory note in the amount of $25,000 together with two-year
warrants to purchase 1,875,000 shares of our common stock at an exercise price
of $0.02 per share.  The promissory note bears interest at a rate of 12%
per annum, and the note is due in one year.  Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $950,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $750,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.  In March 2011, we entered into a
convertible promissory note in the amount of $5,000 together with two-year
warrants to purchase 375,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $250,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.  In March and April 2011, we issued
fully vested five-year warrants to purchase an aggregate of 840,000 shares of
our common stock at an exercise price of $0.001 per share for financial and
advisory services to a consultant.  In April 2011, we entered into a
convertible promissory note in the amount of $10,000 together with two-year
warrants to purchase 750,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is      18%.  As the Company is
currently seeking to raise financing under a private placement transaction, the
promissory note contains an optional conversion clause whereby, during a 30-day
period after the completion of such private placement transaction raising in
excess of $250,000, the holder may either convert the promissory note at the
share price of such private placement transaction or demand repayment out of the
proceeds of such financing.  Under the terms of the promissory note
agreement, if the share price of the first $250,000 of such private placement is
below $0.02 (the strike price of the warrants), the strike price of the warrants
will be downward adjusted to such share price of the private placement.  Summary  We are dependent on external sources of financing to meet
our working capital needs.  Current sources of liquidity are insufficient
to provide for budgeted and anticipated working capital requirements.  We
will therefore be required to seek additional financing to satisfy our working
capital requirements.  No assurances can be given that such capital will be
available to us on acceptable terms, if at all.  In addition to equity
financing and strategic investments, we may seek additional related party loans.
 If we are unable to obtain any such additional financing or if such
financing cannot be obtained on terms acceptable to us, we may be required to
delay or scale back our operations, which would adversely affect our ability to
generate future revenues and may force us to curtail or cease our operating
activities.  To attain profitable operations, managements plan is to
execute its strategy of (i) continuing the development of our proprietary mobile
marketing solution; (ii) building additional strategic partnerships with
technology partners; (iii) building strategic partnerships with premier
advertising inventory partners; and (iv) executing sales relationships with
national and global brands in order to drive profitability.  We will
continue to be dependent on outside capital to fund our operations for the
foreseeable future.  Any financing we obtain may further dilute or
otherwise impair the ownership interest of our current stockholders.  If we
fail to generate positive cash flows or fail to obtain additional capital when
required, we could modify, delay or abandon some or all of our plans.
 These factors, among others, raise substantial doubt about our ability to
continue as a going concern.  Comparison of the Year Ended December 31, 2010, to the
Year Ended December 31, 2009  We had no revenues in the year ended
December 31, 2010 and 2009.  In the year ended December 31, 2010 and 2009,
we incurred net losses of approximately $1,723,000 and $1,916,000, respectively.
 Operating expenses decreased to $1,547,000 in the year ended December 31,
2010, from $1,881,000 in the year ended December 31, 2009, due primarily to
non-recurring impairment of $355,000 of patent costs which was recorded to
operating expenses in the prior year.  We expect that operating expenses will
increase in 2011 as we implement our growth strategy.  Interest expense was $43,000 in the
prior year compared to $84,000 in the current year.  Interest expense
relates to convertible notes and amortization of debt discounts.  We recorded change in embedded
derivative fair value liability of $92,000 to other expense in the current year
compared to $8,000 recorded to other income in the prior year due to the
issuance of convertible notes payable and warrants with variable terms.  Off-Balance Sheet Arrangements  As of December 31, 2010, we did not have any off-balance
sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC
Regulation S-K.        ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  MONTAVO, INC. (A
Development Stage Company)  Index
to the Audited Financial Statements  For
the Year Ended December 31, 2010   Report
of Independent Registered Public Accounting Firm 15-16  Balance
Sheets as of December 31, 2010 and 2009 17  Statements of
Operations for the years ended December 31, 2010 and 2009, and
for the period from December 23, 2004 (Inception) to December 31, 2010 18  Statement of Changes
in Stockholders Deficit for the period from December
23, 2004 (Inception) to December 31, 2010 19  Statements of Cash
Flows for the years ended December 31, 2010 and 2009, and
for the period from December 23, 2004 (Inception) to December 31, 2010 20  Notes
to the Audited Financial Statements 21-40           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM    To the
Board of Directors and Stockholders Montavo, Inc. Bellevue, Washington   We have
audited the accompanying balance sheets of Montavo, Inc. (a development
stage company) ("the Company") as of December 31, 2010 and 2009, and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the years then ended, and for the period from December 23, 2004 (date
of inception) to December 31, 2010.  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).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Company has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also
includes 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 financial statements referred to above present fairly, in all
material respects, the financial position of Montavo, Inc. (a development
stage company) as of December 31, 2010 and 2009, and the results of its
operations and its cash flows for the years then ended, and for the period from
December 23, 2004 (date of inception) to December 31, 2010, in
conformity with accounting principles generally accepted in the United
States.         The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern.  As discussed in Note 2 to the financial
statements, the Company has experienced recurring losses from operations since
inception, has a working capital deficit, and has a deficit accumulated during
the development stage.  These conditions raise substantial doubt about the
Company's ability to continue as a going concern.  Management's plans
regarding these matters are also described in Note 2.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.      Seattle, Washington April 15, 2011


MONTAVO, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS  December 31,


December 31,2010


2009(in thousands, except share
amounts)ASSETSCurrent assets:Prepaid expenses and other assets



$
10

$
164Total current assets





10


164Total assets




$
10

$
164LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)Current liabilities:Accounts payable and accrued expenses



$
523

$
327Accounts payable - related parties




534


344Note payable to stockholder





25


25Accrued interest






17


3Convertible debt, net of discount of $89 and $10,
respectively


119


10Note payable






10


-Embedded fair value derivative liabilities




233


4Total current liabilities





1,461


713Commitments and contingenciesStockholders' equity (deficit):Preferred stock, $0.001 par value; 25,000,000 and
5,000,000 sharesauthorized at December 31, 2010 and
2009, respectively, and no sharesissued and outstanding





-


-Common stock and additional paid-in capital, $0.001
par value;400,000,000 and 99,000,000 shares
authorized at December 31, 2010and 2009, respectively:
 71,117,241 and 43,418,467 shares issued andoutstanding, respectively





3,799


2,978Deficit accumulated during the development
stage




(5,250)


(3,527)Total stockholders' equity (deficit)




(1,451)


(549)Total liabilities and stockholders' equity
(deficit)


$
10

$
164  See notes to
financial statements





MONTAVO, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS  December 23, 2004(Inception)Years Ended December 31,

ToDecember 31,2010


2009

2010Operating expenses

$
1,547

$
1,881
$
4,954Loss from operations


(1,547)


(1,881)

(4,954)Other income (expense):Interest expense


(84)


(43)

(212)Change in value of embedded fair valuederivative liabilities


(92)


8

(84)Total other expense


(176)


(35)

(296)Net loss

$
(1,723)

$
(1,916)
$
(5,250)Loss per common share - basic and diluted:Net loss per common share - basic and
diluted

$
(0.03)

$
(0.05)Weighted average shares outstanding used incomputing net loss per share - basic and
diluted
56,165,237

38,496,218  See notes to
financial statements








MONTAVO,
INC. (A
DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) For
the Period from Inception to December 31, 2010  Common Stock and

Deficit Accumulated

TotalAdditional Paid-in Capital

During the Development

Stockholders'Shares

Amount

Stage

Equity (Deficit)(in
thousands, except share data)Issuance of
founder shares for cash, December 23, 2004
3,000,000

$
                71

$
                                   -

$
                 71Balance
December 31, 2004
3,000,000

71

-

71Common stock
issued for services in 2005
3,000,000

71

-

71Options and
warrants issued for services in 2005
-

4

-

4Imputed interest
on stockholder advances
-

1

-

1Net loss
-

-

(197)

(197)Balance
December 31, 2005
6,000,000

147

(197)

(50)Common stock
issued for cash in 2006
59,375

2

-

2Options and
warrants issued for services in 2006
-

9

-

9Compensation and
other expense related to options and warrants
-

2

-

2Common stock
issued by stockholders on behalf of Montavo for loanmodification
(accounted for as contribution of capital)
-

38

-

38Imputed interest
on stockholder advances
-

1

-

1Net loss
-

-

(344)

(344)Balance
December 31, 2006
6,059,375

199

(541)

(342)Common stock
issued for cash in 2007
15,000

-

-

-Options and
warrants issued for services in 2007
-

1

-

1Compensation and
other expense related to options and warrants
-

2

-

2Imputed interest
on stockholder advances
-

1

-

1Net loss
-

-

(227)

(227)Balance
December 31, 2007
6,074,375

203

(768)

(565)Common stock
issued for services in 2008
2,525,000

310

-

310Common stock
issued for cash in 2008
296,625

84

-

84Compensation and
other expense related to options and warrants
-

9

-

9Common stock
retained by North Coast in reverse merger
13,080,000

(264)

-

(264)Common stock
issued upon conversion of North Coast notes payable in 2008
1,398,841

250

-

250Common stock
issued upon conversion of Montavo notes payable, accruedinterest and
accounts payable in 2008
1,840,000

949

-

949Common stock
issued upon exercise of options by waiving of exercise priceof
options
1,169,000

10

-

10Recapitalization
10,089,512

-

-

-Imputed interest
on stockholder advances
-

1

-

1Net loss
-

-

(843)

(843)Balance
December 31, 2008
36,473,353

1,552

(1,611)

(59)Common stock
issued for cash in 2009
461,625

113

-

113Common stock
issued in settlement of accounts payable due to related partyin 2009
1,333,333

173

-

173Common stock
issued or issuable for services in 2009
2,771,906

445

-

445Common stock
issued upon conversion of note payable and related accruedinterest
91,281

18

-

18Common stock
issued upon conversion of notes payable andaccrued
interest
232,683

23

-

23Common stock
issued in settlement of accounts payable
1,054,286

74

-

74Issuance of
units comprised of common stock and warrants for cash
1,000,000

25

-

25Warrants issued
for services
-

27

-

27Options issued
for services
-

485

-

485Stockholder
contribution of capital
-

5

-

5Imputed interest
on stockholder advances
-

1

-

1Beneficial
conversion feature of convertible debt
-

37

-

37Net loss
-

-

(1,916)

(1,916)Balance
December 31, 2009
43,418,467

2,978

(3,527)

(549)Common stock
issued or issuable for services in the first quarter of 2010
2,431,950

83

-

83Common stock
issued or issuable for services in the second quarter of 2010
4,092,500

83

-

83Common stock
issued or issuable for services in the third quarter of 2010
2,975,833

72

-

72Common stock
issued or issuable for services in the fourth quarter of 2010
11,767,500

192

-

192Warrants issued
for services
-

34

-

34Common stock
issued in settlement of accounts payable and for cash
2,980,991

67

-

67Common stock
issued for cash in the first quarter of 2010, net
3,250,000

40

-

40Common stock
issued as a fee for convertible notes payable
200,000

5

-

5Compensation and
other expense related to options and warrants
-

245

-

245Net loss
-

-

(1,723)

(1,723)Balance
December 31, 2010
71,117,241

$
           3,799

$
                            (5,250)

$
          (1,451)  See notes to financial statements





MONTAVO, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS  December 23, 2004(Inception)Years ended December 31,


ToDecember 31,2010


2009


2010(in
thousands)Operating
activities:Net loss





$
(1,723)

$
(1,916)

$
(5,250)Adjustments to
reconcile net loss to net cash used by operating activities:Amortization of
debt discount




58


24


84Imputed interest
on stockholder advances



-


1


5Share-based
payments of consulting and other expenses



709


956


2,084Shares issued for
modification of debt terms or as fee



5


-


43Shares issued in
excess of liabilities converted (accounted for as compensation)


-


-


85Excess share
value issued for conversion of accounts payable-related party


-


73


73Change in value
of embedded fair value derivative liabilities


92


8


100Impairment loss
on patent pending and software developed for internal use


-


400


400Changes in
operating assets and liabilitiesPrepaid expenses
and other assets




154


(164)


(10)Accounts payable
and accrued expenses



251


368


679Accounts payable
- related party




190


50


581Accrued
interest





14


2


60Net cash used in
operating activities



(250)


(198)


(1,066)Investing
activities:Investment in
patent




-


(8)


(45)Net cash used in
investing activities



-


(8)


(45)Financing
activities:Proceeds from
sale of units comprised of common stock and warrants


-


25


25Proceeds from
sale of stock under Fuselier Holdings agreement (used to settleaccounts
payable)




58


-


58Stockholder
contributions to capital



-


5


22Proceeds from
issuance of notes payable



165


61


817Principal
payments on notes payable



(13)


-


(121)Proceeds from
sale of common shares



40


113


310Net cash provided
by financing activities



250


204


1,111Net decrease in
cash




-


(2)


-Cash - beginning
of the period




-


2


-Cash - end of the
period



$
-

$
-

$
-Supplemental
disclosure:Cash paid for
income taxes



$
-

$
-

$
-Cash paid for
interest



$
-

$
-

$
-Non-cash
investing and financing activities:Seller-financed
software developed for internal use


$
-

$
35

$
355Shares retained
by North Coast in reverse merger


$
-

$
-

$
264Shares issued to
convert North Coast note payable and accrued interest

$
-

$
18

$
354Shares issued to
convert accounts payable, accrued interest and notes payable

$
-

$
-

$
864Additional shares
issued to Montavo stockholders in merger

$
-

$
-

$
10Shares issued in
settlement of accounts payable


$
9

$
174

$
183Beneficial
conversion feature - notes payable


$
-

$
37

$
37Convertible debt
issued for accounts payable


$
46

$
-

$
46  See notes to
financial statements





MONTAVO, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS  Note 1.  Business and
Organization  We were incorporated under the laws of
the State of Delaware on April 20, 1994. From our incorporation and until
December 13, 2004, we had no operating history other than organizational
matters. On December 13, 2004, we acquired all of the issued and outstanding
capital stock of Trans Media Inc. (Trans Media), a Wyoming corporation
(inception occurred on December 23, 2004).  The acquisition was consummated
pursuant to a Plan of Arrangement and Share Exchange Agreement, dated September
29, 2004, whereby Trans Media became our wholly owned subsidiary.  This
transaction is commonly referred to as a reverse acquisition, in which all of
the outstanding capital stock of Trans Media was effectively exchanged for a
controlling interest in our stock. This type of transaction is considered to be
a recapitalization rather than a business combination.  Accordingly, for
accounting purposes, no goodwill or other intangible assets were recorded.  On May 7, 2008 Trans Media, its wholly
owned subsidiary North Coast Acquisition Corp., a Delaware corporation
(Acquisition Corp.), and Montavo, Inc., a privately-held Washington
corporation (Montavo), executed an Agreement (the Merger Agreement).
Pursuant to the terms of the Merger Agreement, on August 29, 2008, Acquisition
Corp. was merged with and into Montavo, with Montavo being the surviving entity
as a wholly owned subsidiary, and all of the issued and outstanding common stock
of Montavo was exchanged for newly-issued, restricted shares of common stock.
 The merger was accounted for as a reverse merger and recapitalization due
to Montavo having control of the board of directors and control of management at
the date of merger.  We are a development stage company in
the process of deploying an advanced mobile marketing and advertising solution.
We have two patents pending filed for our method and distribution system for
location based wireless presentation of electronic coupons technology and
system and method of delivering ads.  Note 2.  Going
Concern  We have prepared our financial
statements assuming that we will continue as a going concern, which contemplates
realization of assets and the satisfaction of liabilities in the normal course
of business. As of December 31, 2010, we had a deficit accumulated during the
development stage of approximately $5.3 million, negative cash flows from
operations since inception and expect to incur additional losses in the future
as we continue to develop and grow our business. We have funded our losses
primarily through sales of common stock and warrants in private placements and
borrowings from related parties and other investors. The further development of
our business will require capital. At December 31, 2010, we had a working
capital deficit (current assets less current liabilities) of approximately $1.5
million and no cash.  We are dependent on existing cash
resources and external sources of financing to meet our working capital
needs.  Current sources of liquidity are insufficient to provide for
budgeted and anticipated working capital requirements.  We will
therefore be required to seek additional financing to satisfy our working
capital requirements. No assurances can be given that such capital will be
available to us on acceptable terms, if at all. In addition to equity financing
and strategic investments, we may seek additional related party loans.  If
we are unable to obtain any such additional financing or if such financing
cannot be obtained on terms acceptable to us, we may be required to delay or
scale back our operations, including the development of our mobile marketing
solution, which would adversely affect our ability to generate future revenues
and may force us to curtail or cease our operating activities.  To attain profitable operations, managements plan is to
execute its strategy of (i) continuing the development of our proprietary mobile
marketing solution; (ii) building additional strategic partnerships with
technology partners; (iii) building strategic partnerships with premier
advertising inventory partners; and (iv) executing sales relationships with
national and global brands in order to drive profitability.   We will
continue to be dependent on outside capital to fund our operations for the
foreseeable future, and continue to be involved in discussions and negotiations
with investors in order to raise additional funds to provide sufficient working
capital for operations with a near-term goal of generating positive cash flow
from operations.  Any financing we obtain may further dilute or otherwise
impair the ownership interest of our current stockholders. If we fail to
generate positive cash flows or fail to obtain additional capital when required,
we could modify, delay or abandon some or all of our plans. These factors, among
others, raise substantial doubt about our ability to continue as a going
concern. Our financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





Note 3.  Summary of Critical
Accounting Policies and Recently Issued Accounting Standards   Use of
EstimatesThe preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.  The more
significant accounting estimates inherent in preparation of our financial
statements include estimates for valuation of equity related instruments and
valuation allowance for deferred income tax assets.  Cash On
occasion, we maintain balances in excess of federal insurance limits.  Financial
Instruments and Fair Value Our financial instruments consist of cash,
accounts payable, accrued liabilities, accounts payable - related parties, and
notes payable.  We consider fair value to be an exit price representing the
amount that would be received upon the sale of an asset or the transfer of a
liability.  The fair value of financial instruments other than accounts
payable - related parties, note payable to stockholder and convertible notes
payable approximate the recorded value based on the short-term nature of these
financial instruments. The fair value of note payable to stockholder and
accounts payable - related parties is presently undeterminable due to the
related party nature of the obligations. We currently
measure and report at fair value the embedded derivative liabilities for price
adjustable convertible debt and warrants which are further discussed below and
in detail in Note 4.  The following table summarizes our financial
liabilities measured at fair value on a recurring basis as of December 31, 2010
and 2009 (in thousands): Balance atDecember 31,2010

Level 1Quoted prices
inactive markets foridentical assets

Level
2Significant otherobservableinputs

Level
3SignificantunobservableinputsLiabilities:Embedded
fair value derivative liabilities

$
233





$
233Total
financial liabilities at fair value

$
233





$
233Balance atDecember 31,2009

Level 1Quoted prices
inactive markets foridentical assets

Level
2Significant otherobservableinputs

Level
3SignificantunobservableinputsLiabilities:Embedded
fair value derivative liabilities

$
4





$
4Total
financial liabilities at fair value

$
4





$
4  The following
table is a roll forward for the year ended December 31, 2010 of the embedded
derivative fair value liabilities, as to which fair value is determined by Level
3 inputs (in thousands):  Beginning
balance at January 1, 2010

$
4Embedded
fair value derivative liabilities


137Change
in fair value included in net loss


92Ending
balance at December 31, 2010

$
233  The following table is a roll forward
for the year ended December 31, 2009 of the embedded fair value derivative
liability, as to which fair value is determined by Level 3 inputs (in
thousands):  Beginning
balance at January 1, 2009

$
Issuance
of convertible note with embedded fair value derivative liability


12Change
in fair value included in net loss


(8)





Ending
balance at December 31, 2009

$
4 Embedded
Fair Value Derivative Liabilities We evaluate financial instruments for
freestanding or embedded derivatives.  Derivative instruments that have
been separated from the host contract are recorded at fair value with changes in
value recognized as other income (expense) in the statements of operations in
the period of change.   We use the Black-Scholes option-pricing model
as our method of valuation for embedded fair value liabilities. Our
determination of the fair value of embedded derivatives on the date of grant
using the Black-Scholes model is affected by our stock price as well as highly
subjective assumptions regarding a number of highly complex and subjective
variables. These variables include, but are not limited to, the contractual life
of the underlying security and expected stock price volatility over the term (if
the use of expected stock price volatility over the term has a material impact
on the financial statements).   The valuation of embedded fair value
derivative liabilities does not include the impact of adjustments for the
probability of certain events occurring that would have an impact on the
valuations since management believes the likelihood of those events occurring is
remote. Software developed for internal useSoftware development costs for internal use were capitalized in accordance
with relevant authoritative accounting literature and, once placed in service,
amortized using the straight-line method over the estimated useful life. We are
currently developing proprietary Montavo mobile search and mobile advertising
media technology. A significant portion of the costs have been incurred through
a vendor which is 100%-owned by our former Chief Development Officer, Brian
Conte.  See Note 6 regarding the funds owed to this related-party vendor.
 As of December 31, 2010 and 2009, the software was still under development
and had not been placed in service and therefore amortization had not yet begun.
 We evaluated the software development costs and determined that the costs
were fully impaired, and accordingly, recorded an impairment loss of $355,000,
included in operating expenses, during the fourth quarter of 2009.  Patent pending The cost of
patents represents amounts paid to third parties, including legal costs
associated with successfully defending or obtaining patents. Amortization will
be calculated on a straight-line basis over the estimated useful life of the
related asset beginning when the patent is issued. If patent applications are
unsuccessful, cost associated with these patents is expensed immediately. We
have a patent pending technology filed for Method and Distribution System for
Location Based Wireless Presentation of Electronic Coupons. We had capitalized
costs for patent-related legal fees and as of December 31, 2009, the patent is
still pending and therefore amortization had not yet begun. We evaluated the
patent-related legal costs and determined that the costs were fully impaired,
and accordingly, recorded an impairment loss of $45,000, included in operating
expenses, during the fourth quarter of 2009. Impairment
of Long-Lived Assets Long-lived assets, such as patents pending and
software developed for internal use are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Conditions that would necessitate an impairment include a
significant decline in the observable market value of an asset, a significant
change in the extent or manner in which an asset is used, or any other
significant adverse change that would indicate that the carrying amount of an
asset or group of assets is not recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset.
If the carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized in the amount by which the carrying amount of
the asset exceeds the fair value of the asset. In the fourth quarter of 2009, we
determined that the amounts previously capitalized for patent pending and
software developed for internal use totaling approximately $400,000 were
impaired due to uncertainty regarding our ability to continue as a going concern
and accordingly recorded an impairment loss as of that date. Income
taxes  We account for income taxes using an asset and liability method
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred income taxes
are recognized for the tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to amounts expected to be realized. The provision for income taxes
represents the tax payable for the period and change during the period in net
deferred tax assets and liabilities.  We have
identified our federal tax return as our major tax jurisdiction, as defined.
We do not believe any reserves for uncertain income tax positions are required.
Our policy for recording interest and penalties associated with uncertain income
tax positions is to record such items as a component of interest expense. Net loss per
common share Basic and diluted net loss per common share is computed by
dividing the net loss by the weighted average number of common shares
outstanding during the period. Diluted loss per share excludes the effect of
common





stock equivalents (convertible
notes, stock options and warrants) since such inclusion in the computation would
be anti-dilutive. The following numbers of shares have been excluded for all
periods presented (in thousands), as of December 31:  December
31,

December
312010

2009Convertible notes

200

200Stock Options

14,410

11,483Warrants

16,223

2,200Total

30,833

13,883   On September 8,
2009, we entered into a convertible promissory note for $20,000 at a stated
interest rate of 15%. The promissory note is due within twenty-four months after
date of issue, and on demand thereafter. The note is convertible into shares of
our common stock at $0.10 per share.  Terms of the convertible note provide
that the conversion price of the notes will be reduced in the event of
subsequent financings at an effective price per share less than the conversion
price. This provision expired as of September 8, 2010.  The shares issuable
under the note are included in the table above at the stated conversion rate of
$0.10.  On May 4, 2010,
we entered into a convertible promissory note for $40,000 at a stated interest
rate of 12%.  The note was due, on November 3, 2010, and carries a default
rate of interest of 18%.  The note is convertible into shares of our common
stock at a variable conversion price, such that the average of the lowest
Trading Prices (as determined by averaging the highest closing bid and lowest
closing ask prices) of the Companys common stock as listed on the OTCBB during
the five (5) trading day period ending one (1) day prior to the date the
conversion notice is sent by the holder to the Company multiplied by 35%.
 The shares issuable under the note are excluded from the table above as
the note is convertible at a variable conversion price.  See Note 4.  In August and September 2010, we
entered into convertible promissory notes in the aggregate amount of $40,000
together with two-year warrants to purchase 3,750,000 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
notes contain an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holders may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement.  The shares issuable under the notes
are excluded from the table above as the notes are convertible at a variable
conversion price.  See Note 4.  In September 2010, we transferred
$20,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $20,000 together with
two-year warrants to purchase 1,500,000 shares of our common stock at an
exercise price of $0.02 per share.  The promissory note bears interest at a
rate of 12% per annum, and the note is due in one year.  Upon default, the
interest rate is 18%.  As the Company is currently seeking to raise
financing under a private placement transaction, the promissory note contains an
optional conversion clause whereby, during a 30-day period after the completion
of such private placement transaction raising in excess of $250,000, the holder
may either convert the promissory note at the share price of such private
placement transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement. The shares issuable under the notes are excluded from the
table above as the notes are convertible at a variable conversion price.
 See Note 4.  In October 2010, we transferred
$25,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $25,000 at a stated
interest rate of 12%, together with two-year warrants to purchase 1,875,000
shares of our common stock at an exercise price of $0.02 per share. The
promissory note is due within one year.   Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory notes contain an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holders may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement. The shares issuable under the notes are excluded from the
table above as the notes are convertible at a variable conversion price.
 See Note 4.





In October and December 2010, we
entered into convertible promissory notes in the aggregate amount of $37,500
together with two-year warrants to purchase 2,812,500 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
notes contain an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holders may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement. The shares issuable under the notes are
excluded from the table above as the notes are convertible at a variable
conversion price.  See Note 4.  Debt Discounts Debt discounts
are being amortized through periodic charges to interest expense over the
maximum term of the related financial instrument using the effective interest
method. Total amortization of debt discounts amounted to approximately $58,000,
$24,000 and $84,000 during the year ended December 31, 2010, 2009 and the period
from inception to December 31, 2010, respectively.  Share-Based PaymentsWe
have granted shares of our common stock and stock options and warrants to
purchase shares of our common stock to various parties for services and in
connection with financing activities.  The fair values of shares issued
have been based on closing market prices for periods after October 1, 2009 and
at prices of recent cash transactions for periods prior.  We use the
Black-Scholes option-pricing model as our method of valuation for share-based
awards. Share-based compensation expense is based on the value of the portion of
the stock-based award that will vest during the period, adjusted for expected
forfeitures.  Our determination of the fair value of share-based awards on
the date of grant using an option pricing model is affected by our stock price
as well as assumptions regarding a number of highly complex and subjective
variables. These variables include, but are not limited to, the expected life of
the award, expected stock price volatility over the term of the award (if the
use of expected stock price volatility over the term of the award has a material
impact on the financial statements) and historical and projected exercise
behaviors.   The estimation of share-based awards that will ultimately
vest requires judgment, and to the extent actual or updated results differ from
our current estimates, such amounts will be recorded in the period estimates are
revised. Although the fair value of share-based awards is determined in
accordance with authoritative guidance, the Black-Scholes option pricing model
requires the input of highly subjective assumptions and other reasonable
assumptions could provide differing results.  Non-cash compensation expense
is recognized on a straight-line basis over the applicable vesting periods of
one to five years (deemed to be the service period), based on the fair value of
such share-based awards on the grant date.  Note 4.   Notes Payable  In September 2008, we entered into a
promissory note with a stockholder in the principal amount of $25,000 with a
stated interest rate of 12%.  Interest expense related to this note was not
material in the year ended December 31, 2010 and 2009 and the period from
inception to December 31, 2010.  On January 16, 2009, we entered into a
convertible promissory note for $4,950 at a stated interest rate of 5% per
annum.  On January 16, 2009, we entered into a convertible promissory note
for $5,000 at a stated interest rate of 7% per annum. On January 26, 2009, we
entered into a convertible promissory note for $5,062 at a stated interest rate
of 5%. In April 2009, we entered into a convertible promissory note to a related
party for $3,200 at a stated interest rate of 5% per annum. The notes and
related accrued interest were convertible into shares of our common stock at
$0.20 per share at the option of the holder. In March 2009, the first three
notes discussed above were converted into 75,060 shares of common stock at a
conversion rate of $0.20 per share.  On April 15, 2009, we issued 16,221
shares of our common stock at $0.20 per share pursuant to the conversion of a
related party promissory note with a principal balance of approximately
$3,200.  On April 6, 2009, we entered into a
convertible promissory note for $23,000 at a stated rate of 7% per annum. The
note and related accrued interest were convertible into shares of our common
stock at 0.10 per share beginning May 30, 2009.  In April 2009, the notes
and accrued interest were converted into 232,683 shares of common stock for
conversion of principal and accrued interest.  On September 8, 2009, we entered into
a convertible promissory note for $20,000 at a stated interest rate of 15%. The
promissory note is due within twenty-four months after date of issue, and on
demand thereafter. The note is convertible into shares of our common stock at
$0.10 per share.  Terms of the convertible note provided that the
conversion price of the notes be reduced in the event of subsequent financings
at an effective price per share less than the conversion price, such that in the
event we secure a future equity investment round totaling a minimum of
$1,000,000 within 12 months of the date of the note, the convertible note will
automatically be converted into shares of stock in the amount of 50% of the
price per share of the equity investment or the maximum price of $0.10 per
share, whichever is lower. This provision expired as of September 8, 2010.
 In accordance with the authoritative





guidance related to convertible notes with down-round
protection, we recorded a fair value liability for price adjustable convertible
notes of $12,330 at issuance.  The fair value liability was revalued
quarterly utilizing Black-Scholes valuation model computations with the increase
or decrease in fair value being reported in the statement of operations as other
income (expense).  At March 31, 2010, the Black-Scholes assumptions
utilized were as follows:  stock price of $0.03, volatility of 162%, risk
free rate of 3.4%, expected life of 1 year, dividend rate of 0% and we recorded
a decrease in the fair value liability of approximately $2,400 as other income.
 At June 30, 2010, the Black-Scholes assumptions utilized were as follows:
 stock price of $0.015, volatility of 162%, risk-free rate of 0.42%,
expected life of 0.75 year, dividend yield of 0.0% and we recorded a decrease in
the fair value liability of approximately $600 as other income.  On March 1, 2010,
we entered into a promissory note for $7,000 at a stated interest rate of 8% per
annum, payable upon demand by the holder.  We repaid the promissory note in
May 2010.  On March 8, 2010,
we entered into a promissory note for $6,000 at a stated interest rate of 8% per
annum, payable upon demand by the holder. On March 8, 2010, in accordance with
the terms of the promissory note, we issued 100,000 shares of our common stock
to the holder as loan fees.  The loan was repaid in March 2010.  On April 15, 2010, we entered into a
promissory note for $3,000 at a stated interest rate of 8% per annum, payable
upon demand by the holder. On April 15, 2010, in accordance with the terms of
the promissory note, we issued 100,000 shares of our common stock to the holder
as loan fees.  In December 2010, this promissory note was settled in
connection with a transaction with the same holder.  See discussion
below.  On May 4, 2010, we entered into a
convertible promissory note for $40,000 at a stated interest rate of 12%.
 The note was due on November 3, 2010, and carries a default rate of
interest of 18%.  The note is convertible into shares of our common stock
at a variable conversion price, such that the average of the lowest Trading
Prices (as determined by averaging the highest closing bid and lowest closing
ask prices) of the Companys common stock as listed on the OTCBB during the five
(5) trading day period ending one (1) day prior to the date the conversion
notice is sent by the holder to the Company multiplied by 35%. In accordance
with the authoritative guidance related to convertible notes with down-round
protection, we recorded a fair value liability for price adjustable convertible
notes of $34,000 at issuance.  The fair value liability is revalued
quarterly utilizing Black-Scholes valuation model computations with the increase
or decrease in fair value being reported in the statement of operations as other
income (expense).  At June 30, 2010, the Black-Scholes assumptions utilized
were as follows:  stock price of $0.015, volatility of 162%, risk-free rate
of 0.22%, expected life of 0.4 year, dividend yield of 0.0% and we recorded an
increase in the fair value liability of approximately $8,000 as other expense.
 At September 30, 2010, the Black-Scholes assumptions utilized were as
follows:  stock price of $0.02, volatility of 162%, risk-free rate of
0.18%, expected life of 0.1 year, dividend yield of 0.0% and we recorded an
increase in the fair value liability of approximately $21,100 as other expense.
 At December 31, 2010, the Black-Scholes assumptions utilized were as
follows:  stock price of $0.02, volatility of 162%, risk-free rate of
0.09%, expected life of 0.001 year, dividend yield of 0.0% and we recorded an
increase in the fair value liability of approximately $10,900 as other
expense.  On July 28, 2010,
we entered into a promissory note for $10,200 at a stated interest rate of 10%
per annum, or $12,000, whichever is higher.  In August and September 2010, we
entered into convertible promissory notes in the aggregate amount of $40,000
together with two-year warrants to purchase 3,750,000 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
notes contain an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holders may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement. In accordance with the authoritative
guidance related to instruments with down-round protection, we recorded a fair
value liability of $16,800 at issuance.  The fair value liability is
revalued quarterly utilizing Black-Scholes valuation model computations with the
increase or decrease in fair value being reported in the statement of operations
as other income (expense). At September 30, 2010, the Black-Scholes assumptions
utilized were as follows:  stock price of $0.02, volatility of 162%,
risk-free rate of 0.53%, expected life of 2 years, dividend yield of 0.0% and we
recorded an increase in the fair value liability of approximately $38,000 for
the three months ended September 30, 2010 as other expense.  At December
31, 2010, the Black-Scholes assumptions utilized were as follows:  stock
price of $0.02, volatility of 162%, risk-free rate of 0.61%, expected life of
1.75 years, dividend yield of 0.0% and we recorded a decrease in the fair value
liability of approximately $11,700 for the three months ended December 31, 2010
as other income.





In August 2010, we entered into a
promissory note for $1,000 at a stated interest rate of 8% per annum, payable
upon demand by the holder.  In December 2010, we entered into a convertible
promissory note with the same holder in the aggregate amount of $25,000 together
with two-year warrants to purchase 1,875,000 shares of our common stock at an
exercise price of $0.02 per share, whereby we received $20,000 in cash and the
April promissory note for $3,000, the August $1,000 promissory note and $1,000
in accounts payable to the same party were settled.  The December 2010
promissory note bears interest at a rate of 12% per annum, and the note is due
in one year.  Upon default, the interest rate is 18%.  As the Company
is currently seeking to raise financing under a private placement transaction,
the promissory note contains an optional conversion clause whereby, during a
30-day period after the completion of such private placement transaction raising
in excess of $250,000, the holder may either convert the promissory note at the
share price of such private placement transaction or demand repayment out of the
proceeds of such financing.  Under the terms of the promissory note
agreement, if the share price of such private placement is below $0.02 (the
strike price of the warrants), the strike price of the warrants will be downward
adjusted to such share price of the private placement. In accordance with the
authoritative guidance related to instruments with down-round protection, we
recorded a fair value liability of approximately $25,000 at issuance.  The
fair value liability is revalued quarterly utilizing Black-Scholes valuation
model computations with the increase or decrease in fair value being reported in
the statement of operations as other income (expense). At December 31, 2010, the
Black-Scholes assumptions utilized were as follows:  stock price of $0.02,
volatility of 162%, risk-free rate of 0.61%, expected life of 2 years, dividend
yield of 0.0%.  We recorded an increase in the fair value liability of
approximately $3,100 for the three months ended December 31, 2010 as other
expense.  In September 2010, we transferred
$20,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $20,000 together with
two-year warrants to purchase 1,500,000 shares of our common stock at an
exercise price of $0.02 per share.  The promissory note bears interest at a
rate of 12% per annum, and the note is due in one year.  Upon default, the
interest rate is 18%.  As the Company is currently seeking to raise
financing under a private placement transaction, the promissory note contains an
optional conversion clause whereby, during a 30-day period after the completion
of such private placement transaction raising in excess of $250,000, the holder
may either convert the promissory note at the share price of such private
placement transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement. In accordance with the authoritative guidance related to
instruments with down-round protection, we recorded a fair value liability of
approximately $8,300 at issuance.  The fair value liability is revalued
quarterly utilizing Black-Scholes valuation model computations with the increase
or decrease in fair value being reported in the statement of operations as other
income (expense). At September 30, 2010, the Black-Scholes assumptions utilized
were as follows:  stock price of $0.02, volatility of 162%, risk-free rate
of 0.53%, expected life of 2 years, dividend yield of 0.0% and we recorded an
increase in the fair value liability of approximately $19,000 for the three
months ended September 30, 2010 as other expense.  At December 31, 2010,
the Black-Scholes assumptions utilized were as follows:  stock price of
$0.02, volatility of 162%, risk-free rate of 0.61%, expected life of 1.75 years,
dividend yield of 0.0%.  We recorded a decrease in the fair value liability
of approximately $5,900 for the three months ended December 31, 2010 as other
income.  In October 2010, we transferred
$25,000 of accounts payable due to our CEO to a third party.  These amounts
were then converted into a convertible promissory note for $25,000 at a stated
interest rate of 12%, together with two-year warrants to purchase 1,875,000
shares of our common stock at an exercise price of $0.02 per share. The
promissory note is due within one year.   Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory notes contain an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holders may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
such private placement is below $0.02 (the strike price of the warrants), the
strike price of the warrants will be downward adjusted to such share price of
the private placement. In accordance with the authoritative guidance related to
instruments with down-round protection, we recorded a fair value liability of
$25,000 at issuance.  The fair value liability is revalued quarterly
utilizing Black-Scholes valuation model computations with the increase or
decrease in fair value being reported in the statement of operations as other
income (expense).  At December 31, 2010, the Black-Scholes assumptions
utilized were as follows:  stock price of $0.02, volatility of 162%,
risk-free rate of 0.61%, expected life of 1.75 years, dividend yield of 0.0% and
we recorded an increase in the fair value liability of approximately $1,900 for
the three months ended December 31, 2010 as other expense.  In October and December 2010, we
entered into convertible promissory notes in the aggregate amount of $37,500
together with two-year warrants to purchase 2,812,500 shares of our common stock
at an exercise price of $0.02 per share.  The promissory notes bear
interest at a rate of 12% per annum, and the notes are due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
note contains an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holder may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private





placement. In accordance with the authoritative guidance
related to instruments with down-round protection, we recorded a fair value
liability of $28,000 at issuance.  The fair value liability is revalued
quarterly utilizing Black-Scholes valuation model computations with the increase
or decrease in fair value being reported in the statement of operations as other
income (expense).  At December 31, 2010, the Black-Scholes assumptions
utilized were as follows:  stock price of $0.02, volatility of 162%,
risk-free rate of 0.61%, expected life of 1.75 years, dividend yield of 0.0% and
we recorded an increase in the fair value liability of approximately $12,300 for
the three months ended December 31, 2010 as other expense.  Notes payable to stockholder, note
payable and convertible debt consists of the following at December 31, 2010 and
2009 (amounts in thousands, except percentages): December 31,

December 31,2010

200912% Promissory note due to stockholder

$
               25

$
                 2510% Promissory note

10

-18% Convertible Promissory note, in default (due
11/3/10)

40

-12% Convertible Promissory note, due 8/3/11, net ofdiscount of $4 and $0 at December 31, 2010
andDecember 31, 2009, respectively

16

-12% Convertible Promissory note, due 8/5/11, net
ofdiscount of $3 and $0 at December 31, 2010
andDecember 31, 2009, respectively

7

-15% Convertible Promissory note, due 9/8/2011, net
ofdiscount of $4 and $10 at December 31, 2010
andDecember 31, 2009, respectively

16

1012% Convertible Promissory notes, due 9/8/11, net
ofdiscount of $10 and $0 at December 31, 2010
andDecember 31, 2009, respectively

20

-12% Convertible Promissory note, due 10/5/11, net
ofdiscount of $19 and $0 at December 31, 2010
andDecember 31, 2009, respectively

6

-12% Convertible Promissory notes, due 10/13/11, net
ofdiscount of $11 and $0 at December 31, 2010
andDecember 31, 2009, respectively

14

-12% Convertible Promissory notes, due 12/3/11, net
ofdiscount of $8 and $0 at December 31, 2010
andDecember 31, 2009, respectively

-

-12% Convertible Promissory notes, due 12/22/11, net
ofdiscount of $5 and $0 at December 31, 2010
andDecember 31, 2009, respectively

-
-
-12% Convertible Promissory notes, due 12/29/11, net
ofdiscount of $25 and $0 at December 31, 2010
andDecember 31, 2009, respectively

-

-$
             154

$
                 35  Note 5.  Stockholders Equity (Deficit)  Preferred Stock On August 28,
2008, our stockholders approved an increase in the number of authorized shares
of our preferred stock from 1,000,000 to 5,000,000 shares.  Our board of
directors has the authority, without action by the stockholders, to designate
the rights, preferences and privileges of each series, any or all of which may
be greater than the rights of our common stock. No shares of preferred stock
have been designated or issued.  On May 19, 2010, a Certificate of
Amendment was filed giving effect to the increase in the number of authorized
preferred shares to 25,000,000.  Common Stock  Holders of
our common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the holders of our common stock. Subject to the
rights of the holders of any class of our capital stock having any preference or
priority over our common stock, the holders of shares of our common stock are
entitled to receive dividends that are declared by our board of directors out of
legally available funds. In the event of our liquidation, dissolution or
winding-up, the holders





of common stock are entitled to share ratably in our net
assets remaining after payment of liabilities, subject to prior rights of
preferred stock, if any, then outstanding. Our common stock has no preemptive
rights, conversion rights, redemption rights or sinking fund provisions, and
there are no dividends in arrears or default. All shares of our common stock
have equal distribution, liquidation and voting rights, and have no preferences
or exchange rights.  On August 28, 2008, our stockholders
approved an increase in the number of authorized shares of our common stock from
20,000,000 to 99,000,000.  A Certificate of Amendment was filed May 19,
2010, giving effect to the increase in the number of authorized common shares to
400,000,000.  Common Stock Issuances 
In January 2008, we issued 2,000,000 shares of our common stock for services.
The shares were recorded at their fair value of $47,400 and the expense was
recorded to general and administrative expense during the first quarter of
2008. In August
2008, we issued an additional  47,250 shares of our common stock related to
the bridge notes previously issued in fiscal 2007, valued at $1,057.
  In August 2008, we issued 13,080,000 shares of our common stock in
relation to the Merger Agreement with North Coast. In the nine
months ending September 30, 2008, we issued 44,375 shares of our common stock in
connection with the bridge notes and accounted for the issuance as stock for
cash totaling $1,114.  In September 2008, we converted the bridge notes,
accrued interest and accounts payable totaling $864,288 into 1,670,600 shares of
our common stock.  We issued an additional 169,400 shares of our common
stock in excess of the original agreed upon conversion price and current market
prices resulting in stock based compensation expense of $84,700.  In
September 2008, we issued 1,169,000 shares of our common stock for upon exercise
of options and warrants with an aggregate exercise price of $10,192.  We
waived the exercise price resulting in stock based compensation expense of
$10,192.  In September 2008, we issued 525,000 shares for services.
 The shares were recorded at their fair value of $262,500 and the expense
was recorded to general and administrative expense in the third quarter of 2008.
 In September 2008, $70,050 of principal and $15,628 of interest related to
notes payable which we assumed in connection with the reverse merger were
converted to 700,000 shares of our common stock. On November 5,
2008, we issued 130,000 shares of our common stock at $0.40 per share for gross
proceeds of $52,000.  On November 28, 2008, we issued 37,500 shares of our
common stock at $0.40 per share for gross proceeds of $15,000. On December
16, 2008, we issued 37,500 shares of our common stock at $0.40 per share for
gross proceeds of $15,000. In November
and December 2008, $163,549 of principal and $1,090 of interest related to notes
payable which we assumed in connection with the reverse merger were converted
into 698,841 shares of our common stock. On November
28, 2008, we issued 10,089,512 shares of our common stock in connection with the
recapitalization.  In February 2009, we issued an
aggregate of 22,000 shares of our common stock to consultants for advisory
services. The shares were recorded at their fair value of $11,453 and the
expense was recorded to operating expenses during the first quarter of 2009.
 In addition, in February 2009, we issued 25,000 shares of our common stock
to a consultant for services. The shares were recorded at their fair value of
$12,000 and the expense was recorded to operating expenses during the first
quarter of 2009.  On February 12, 2009, we issued 45,000 shares of our
common stock for cash at $0.40 per share for gross proceeds of $18,000.  In March 2009, we issued 335,000
shares of our common stock for cash at $0.20 per share for gross proceeds of
$67,000.    In March 2009, we issued 54,800 shares of our common
stock for advisory services. The shares were recorded at their fair value of
$20,782 and the expense was recorded to general and administrative expense
during the first quarter of 2009.  On March 25, 2009, we issued 75,060
shares of our common stock at $0.20 per share pursuant to the conversion of
three promissory notes having an aggregate principal balance of $15,012 (See
Note 4).  In April 2009, we issued 325,000
shares of our common stock to Wakabayashi Fund LLC for investor relations
services.  The shares were recorded at a fair value of $81,250 based on the
price of our common stock in recent stock sales and the expense was recorded to
operating expenses during the second quarter of 2009.  In addition,
pursuant to the consulting agreement dated April 1, 2009, we were to issue
162,500 shares of our common stock monthly for a period of four months on a
performance-basis, and at managements discretion, an additional 200,000 common
shares may be issued as an incentive bonus.   As of December 31, 2010,
no additional shares of our common stock are issuable relating to this
consulting agreement.  In April 2009, we issued 145,000
shares of our common stock for services. The shares were recorded at a fair
value of $29,000 based on the price of our common stock in recent stock sales
and the expense was recorded to operating expenses during the second quarter of
2009.  On April 3, 2009, we issued 16,000 shares of our common stock for
cash at $0.20 per share for gross





proceeds of $3,200.  On April 24, 2009, we issued
50,000 shares of our common stock for cash at $0.40 per share for gross proceeds
of $20,000.  On April 15, 2009, we issued 16,221 shares of our common stock
at $0.20 per share pursuant to the conversion of a related party promissory note
with a principal balance of approximately $3,200 and in April 2009, we issued an
additional 232,683 shares of our common stock pursuant to the conversion of a
convertible promissory note and related accrued interest in the aggregate amount
of $23,268 (See Note 4). On May 19,
2009, we issued 1,333,333 shares of our common stock to a related party vendor
for reduction of accounts payable of $100,000. The shares when issued had an
estimated fair value of approximately $173,300 based on the closing market
prices on the issue dates, and as a result, we recorded additional expense of
approximately $73,300 in the second quarter 2009.  On June 16, 2009, we issued 200,000
shares of our common stock for legal services. The shares were recorded at a
fair value of $26,000 based on the price of our common stock in recent stock
sales and the expense was recorded to operating expenses during the second
quarter of 2009.  On June 23, 2009, we issued 15,625 shares of our common
stock for cash at $0.32 per share for gross proceeds of $5,000.  In April 2009, we entered into a
six-month software development services contract with Perfect Pixels Media
Group, pursuant to which we agreed to issue shares of our common stock at an
agreed upon rate of $0.50 per share for services to be provided under the
agreement.  In the fourth quarter of 2009, 40,000 shares of our common
stock were issuable under the terms of the agreement, which has terminated in
accordance with its terms, for software development services valued at
$20,000.  On October 1, 2009, we entered into a
six-month business development services contract with Openbridge, pursuant to
which we issued 650,000 shares of our common stock for services to be provided
under the agreement.  The shares were recorded at their fair value of
$65,000 based on the closing market price of our common stock on the date of
issuance, and during the fourth quarter of 2009, we recognized $32,500 in
operating expenses related to these shares, and the remaining $32,500 was
recorded in operating expenses during the three months ended March 31, 2010.
 In accordance with the terms of the agreement, an additional 650,000
shares were issued in April 2010 to be earned in equal monthly installments over
the next six-month term of the agreement, plus an additional 200,000 shares as a
bonus for performance under the contract.  We recorded the 650,000 shares
at their fair value of $10,725 based on the closing market price of our common
stock on the date of issuance and during the three months ended June 30, 2010,
we recorded $5,400 in operating expenses related to these shares. During the
three months ended September 30, 2010, we recorded an additional $5,400 in
operating expenses related to these shares.  The 200,000 shares were fully
vested on the date of issuance and we recorded $3,300 in operating expenses
based on the closing market price of our common stock on the date of
issuance.  On October 9, 2009, we issued
1,000,000 units at $0.025 per unit for gross proceeds of $25,000, with each unit
comprised of one share of our common stock and a two-year warrant to purchase
two shares of our common stock at $0.10 per share.  The warrants were
immediately exercisable.  We evaluated the warrants and determined that the
warrants do not contain any provisions equivalent to net-cash settlement
provisions, and accordingly are accounted for as equity.  The relative fair
value of the common stock was determined to be $10,000 and the relative fair
value of the warrants was determined to be $15,000 based on the relative fair
value allocation of the proceeds received.  In November 2009, we issued 340,000
shares of our common stock to vendors in settlement of accounts payable in the
aggregate amount of $46,000.  In 2009, we issued 5,000 shares of our
common stock to a consultant for recruiting services provided.  The fair
value of the shares of $1,000 was recorded to operating expenses in the fourth
quarter of 2009.  An additional 20,000 shares are issuable to the
consultant for future services pursuant to the terms of the contract, none of
which were issuable as of December 31, 2010 or 2009.  In 2009, we issued 100,000 shares of
our common stock to a consultant for consulting services provided.  The
fair value of the shares of $20,000 was recorded to operating expenses in the
fourth quarter of 2009.  An additional 100,000 shares are issuable to the
consultant for future services pursuant to the terms of the contract, none of
which were issuable as of December 31, 2010 or 2009.  In 2009, 190,000 shares of our common
stock were issued or issuable to consultants for services provided.  The
aggregate fair value of the shares of $9,500 based on the closing price of our
common stock on December 31, 2009 was recorded to operating expenses in 2009.  In 2009, we issued 400,000 shares of
our common stock for future software development services valued at $100,000
based on the closing market price on the date of issuance of the shares,
pursuant to a three-year contract with Treemo, Inc.  As of December 31,
2009, none of the software development services had been utilized, and
accordingly these costs were recorded as prepaid expenses in





our balance sheet as of that date.  During the
fourth quarter of 2010, we determined that, of the $100,000 recorded as a
prepaid, $90,000 was impaired and we recorded an immediate charge to operating
expenses.  On December 4, 2009, we entered into
an agreement with Fuselier Holdings I, Inc.  (Fuselier Holdings).
 Under the terms of the agreement, Fuselier Holdings will negotiate with
vendors on our behalf and settle certain accounts payable in exchange for shares
of our common stock.  We receive cash under the terms of the agreement from
Fuselier Holdings, and such cash is used to settle certain accounts payable at
our discretion.  Fuselier Holdings is authorized under the agreement to
settle accounts payable in incremental amounts up to $25,000, and negotiate
settlement in shares of our common stock at a per share price determined by
averaging the closing price of the previous three (3) full trading days as
reported on the over-the-counter bulletin board (OTCBB) commencing on the day
immediately preceding the day on which our stock is deemed to be freely tradable
upon delivery to Fuselier Holdings, or a mutually agreed upon price (Per Share
Price Calculation).  On December 4, 2009, we also entered into a
consulting agreement with Dr. Jean Fuselier Sr., whereby we will issue shares of
our common stock to Dr. Fuselier equal to the amount of the accounts payable
settled, at a per share price determined in accordance with the Per Share Price
Calculation.  In connection with these agreements, in December 2009,
382,848 shares of our common stock were issued or issuable to Dr. Fuselier for
services, and 714,286 shares of our common stock were issued or issuable to
Fuselier Holdings in settlement of accounts payable of $25,000.  In
connection with the drafting of these agreements, we issued an additional
232,258 shares of our common stock to Dr. Fuselier for legal services in October
2009.   The fair value of the shares of $24,000 based on the closing
price of our common stock on the date of issuance was recorded to operating
expenses in the fourth quarter of 2009. In January 2010, 654,450 shares of our
common stock were issued or issuable to Dr. Fuselier for services valued at
$25,000 under the contract as previously discussed above, and 797,658 shares of
our common stock were issued or issuable to Fuselier Holdings in settlement of
accounts payable totaling $25,000.  In February 2010, 1,250,000 shares of
our common stock were issued or issuable to Dr. Fuselier for services valued at
$25,000 under the contract as previously discussed above, and 1,250,000 shares
of our common stock were issued or issuable to Fuselier Holdings in settlement
of accounts payable totaling $25,000.  In April 2010, we amended our
agreement with Fuselier Holdings, such that if our common stock closed at prices
below $0.03 per share at three mutually agreed upon intervals during April 2010,
we would issue shares of our common stock to Fuselier Holdings at a per share
price of $0.02 rather than the price determined in accordance with the Per Share
Price Calculation.   In addition, we agreed that, for a period of 180
days after the date of issuance, should Fuselier Holdings sell the stock and be
unable to receive net proceeds equal to $8,000, at our option, we will either
issue additional shares to Fuselier Holdings or pay cash such that the amount
received by Fuselier Holdings is equal to $8,000.  In April 2010, we also
amended our consulting agreement with Dr. Jean Fuselier, previously described
above, such that our common stock closed at prices below $0.03 per share at
three mutually agreed upon intervals during April 2010, we would issue shares of
our common stock to Dr. Jean Fuselier equal to the amount of the accounts
payable settled, at a per share price of $0.02 rather than the price determined
in accordance with the Per Share Calculation.  In addition, we agreed that,
for a period of 180 days after the date of issuance, should Dr. Fuselier sell
the stock and be unable to receive net proceeds equal to $8,000, at our option,
we will either issue additional shares to Dr. Jean Fuselier or pay cash such
that the amount received by Dr. Fuselier is equal to $8,000.  The
amendments to the Fuselier Holdings agreement and the Dr. Jean Fuselier
consulting agreement were only applicable to the April 2010 settlement of $8,000
in accounts payable and not to future or past Fuselier Holdings or Dr. Jean
Fuselier consulting agreement transactions.   In April 2010, 400,000
shares of our common stock were issued or issuable to Dr. Fuselier for services
valued at $8,000 under the amended contract, and 400,000 shares of our common
stock were issued or issuable to Fuselier Holdings in settlement of accounts
payable totaling $8,000.  As a result of the April 2010 amendment, in June
2010 we issued an additional 400,000 shares of our common stock to Fuselier
Holdings and in June 2010 we issued an additional 400,000 shares of our common
stock to Dr. Jean Fuselier.  There is no further obligation to issue shares
under this agreement.  In January 2010, we issued 400,000
shares of our common stock for $20,000 in legal services.  In February
2010, we issued 133,333 shares of our common stock for approximately $9,000 of
legal services to settle accounts payable.  In February 2010, we entered into a
one-year agreement with Moxie Ventures, Inc. for business development services.
 Pursuant to the terms of the agreement, we will issue Moxie Ventures, Inc.
$5,000 in shares of our common stock on a monthly basis, as determined by
dividing $5,000 by the closing price of our common stock as of the first five
trading days of each month, up to a maximum of 20,000 shares per month.  In
addition, under the terms of the agreement, we will pay them certain cash
success fees upon capital raising activities.  During 2010, an aggregate of
220,000 shares of our common stock were issuable under the agreement and we
recorded $55,000 in related operating expense.  In March 2010, in
connection with the promissory note transaction described in Note 4, we also
entered into an advisory services agreement with the noteholder, pursuant to
which we will issue him 150,000 shares of our common stock over a period of 12
months for services rendered under the agreement.  In the first quarter of
2010, 12,500 shares were issued or issuable under the terms of the agreement and
accordingly we recorded expense of $375 during the three months ended March 31,
2010 related to the value of the shares based on the closing price of our common
stock on March 31, 2010.  In the second quarter of 2010, 37,500 shares were
issued or issuable under the terms of the agreement and accordingly we recorded
expense of approximately $570 for the three months





ended June 30, 2010, related to the
value of the shares based on the closing price of our common stock on June 30,
2010.  In the third quarter of 2010, 37,500 shares were issued or issuable
under the terms of the agreement and accordingly we recorded expense of
approximately $900 for the three months ended September 30, 2010, related to the
value of the shares based on the closing price of our common stock on September
30, 2010.  In the fourth quarter of 2010, 37,500 shares of our common stock
were issued or issuable under the terms of the agreement and accordingly we
recorded expense of $750 during the three months ended December 31, 2010 related
to the value of the shares based on the closing price of our common stock on
December 31, 2010.  In the first quarter of 2010, 75,000
shares of our common stock were issued or issuable to consultants for services
provided.  The aggregate fair value of the shares of approximately $2,000
based on the closing price of our common stock on March 31, 2010 was recorded to
operating expenses in the first quarter of 2010.  In the second quarter of
2010, 45,000 shares of our common stock were issued or issuable to consultants
for services provided.  The aggregate fair value of the shares of
approximately $675 based on the closing price of our common stock on June 30,
2010 was recorded to operating expenses in the second quarter of 2010.  In
September 2010, we entered into a one-year agreement with a consultant for
services.  Pursuant to the term of the agreement, we will issue the
consultant 40,000 shares of our common stock on a monthly basis.  In the
third quarter of 2010, 70,000 shares of our common stock were issued or issuable
to a consultant for services provided.  The aggregate fair value of the
shares of approximately $1,700 based on the closing price of our common stock on
September 30, 2010 was recorded to operating expenses in the third quarter of
2010.  In the fourth quarter of 2010, 120,000 shares of our common stock
were issued or issuable to a consultant for services provided.  The
aggregate fair value of the shares of approximately $2,400 based on the closing
price of our common stock on December 31, 2010 was recorded to operating
expenses in the fourth quarter of 2010.  In March 2010, we entered into an
agreement with a consultant for capital raising services.  Under the terms
of the agreement, we issued the consultant 150,000 shares of our common stock
upon signing.  An additional 650,000 shares are issuable on a performance
basis pursuant to the terms of the contract.  In any event, if the
consultant secures financing for the Company of $1,000,000 or more, all 800,000
shares become immediately earned and issuable.  The consultant is also
entitled to a 10% cash fee and 5% warrant coverage on qualified financings, such
warrants to be two-year warrants with exercise price at 10% above the price of
the qualified financing and be provided piggyback registration rights.  On March 19, 2010, we issued 1,000,000
shares of our common stock for cash at $0.01 per share for gross proceeds of
$10,000.  On March 22, 2010, we issued 500,000 shares of our common stock
for cash at $0.01 per share for gross proceeds of $5,000.  On March 25,
2010, we issued 1,000,000 shares of our common stock for cash at $0.01 per share
for gross proceeds of $10,000.  On March 29, 2010, we issued 600,000 shares
of our common stock for cash at $0.025 per share for gross proceeds of $15,000.  In April 2010, we entered into a
nine-month agreement with a consultant for investor relations services.
 Pursuant to the terms of the agreement, we issued the consultant 300,000
shares of our common stock upon signing of the agreement.  The aggregate
fair value of the shares of approximately $12,000 based on the closing price of
our common stock was recorded to operating expenses in the second quarter of
2010.  Under the terms of the agreement, an additional 200,000 shares are
issuable to the consultant for future services pursuant to the terms of the
contract, none of which were issuable as of December 31, 2010 or December 31,
2009.  In the second quarter of 2010, we
entered into a consulting agreement with a company for advisory services.
 Under the terms of the agreement, we issued 1,000,000 shares of our common
stock to the consultant for prior services.  The fair value of the shares
of approximately $16,000 based on the closing price of our common stock on April
28, 2010 was recorded to operating expenses in the second quarter of 2010.  In the second quarter of 2010, we
entered into a consulting agreement with an individual for advisory services.
 Under the terms of the agreement, we issued 1,000,000 shares of our common
stock to the consultant for prior services.  The fair value of the shares
of approximately $16,000 based on the closing price of our common stock on April
28, 2010 was recorded to operating expenses in the second quarter of 2010.  In July 2010, we entered into a
six-month consulting agreement for business advisory services, pursuant to which
we will issue the consultant 100,000 shares of our common stock per month.
 As of September 30, 2010, 300,000 shares of our common stock were
issuable. The aggregate fair value of the shares of approximately $7,000 based
on the closing price of our common stock on September 30, 2010 was recorded to
operating expenses in the third quarter of 2010.  As of December 31, 2010,
an additional 300,000 shares of our common stock were issued or issuable under
this contract, which has terminated in accordance with its terms.  The
aggregate fair value of the shares of approximately $6,000 based on the closing
price of our common stock on December 31, 2010 was recorded to operating
expenses in the fourth quarter of 2010.  In July 2010, we entered into an
advisory services agreement with a consulting firm, pursuant to which we issued
2,000,000 shares of our common stock valued at $30,000 for services.





On August 6, 2010, we issued 133,333
shares of our common stock to a vendor in payment of finance charges.  In October 2010, we entered into
advisory services agreements with two consultants whereby we agreed to issue an
aggregate of 11,250,000 shares of our common stock for services over the
one-year term of the agreements.  Stock Incentive Plans  In
May 2009, our board of directors approved the 2009 Employee Stock Incentive Plan
(the 2009 Plan).  Under the 2009 Plan, up to 6,000,000 shares of our
common stock may be issued to directors, employees or consultants pursuant to
share awards or options to purchase our common stock.  We filed a Form S-8
on June 12, 2009 to register the shares of common stock issuable under the 2009
Plan.  On February 11, 2010, we amended our 2009 Plan and filed a revised
Form S-8 increasing the number of reserved shares to 15,000,000.  On May 7,
2010, we again amended our 2009 Plan and filed a subsequent revision to the Form
S-8, increasing the number of reserved shares to 35,000,000.  Stock Options Stock options
to purchase shares of our common stock are granted under our 2009 Plan to
certain employees and consultants, at prices at or above the fair market value
on the date of grant. Non-cash
compensation expense is recognized on a straight-line basis over the applicable
vesting periods of one to five years, based on the fair value on the grant date.
The vesting period is deemed to be the requisite service period.  Certain
option and share awards provide for accelerated vesting if there is a change in
control (as defined in the 2009 Plan and certain employment agreements we have
with key officers). The fair
value of stock-based option awards was estimated at the date of grant using the
Black-Scholes option valuation model with the following weighted average
assumptions for the periods presented as follows:  2010


2009Expected
dividend yield

0
%


0
%Risk
free interest rate

1.98
%


3.34
%Expected
stock volatility

162
%


162
%Expected
option life

5.7 years



6.1 yearsFair
value of options granted
$
0.02


$
0.09  Option
activity was as follows during the years ended December 31, 2009 and 2010:   WeightedWeighted

AverageAverage

Remaining


AggregateExercise

Contractual


IntrinsicOptions


Price

Life


Value(in thousands)Outstanding
December 31, 2008

-

$
-Options
granted

11,613


0.09Options
exercised

-


0Options
expired

-


0Options
forfeited

(130)


0.01Options
cancelled

-


0Outstanding
December 31, 2009
11,483


0.07Options
granted

2,957


0.002Options
exercised

-


0Options
expired

(30)


0.01Options
forfeited

-


0Options
cancelled

-


0Outstanding
December 31, 2010

14,410

$
0.004

8.8
years

$
266Exercisable
December 31, 2010

9,910

$
0.005

8.7
years

$
180  As of
December 31, 2010, we had approximately $217,000 of total unrecognized
compensation cost related to unvested stock options. Total unrecognized
compensation cost will be adjusted for future changes in estimated forfeitures.
We expect to recognize this cost over a weighted average period of approximately
three and a quarter years.





The intrinsic value of stock options
outstanding and exercisable at December 31, 2010 is based on the $0.02 closing
market price of our common stock on that date, and is calculated by aggregating
the difference between $0.02 and the exercise price of each of the outstanding
vested and unvested stock options which have an exercise price less than $0.02.
The total fair value of options that vested during the years ended December 31,
2010 and 2009, net of forfeitures, was approximately $730,000 and $485,000
respectively. Non-Employee
Stock Option Grants In
March, June, September and December 2010, we granted options under our 2009 Plan
to purchase 691,360, 739,729, 1,345,000 and 125,641 shares, respectively, of our
common stock at an exercise price of $0.001 pursuant to our CEOs employment
contract.  As the options were fully vested on the date of grant as
described in Note 6, we recognized immediate expense of approximately $21,000,
$11,000, $32,000 and $3,000, respectively, related to the fair value of the
options.  The options have a 10-year term. In January 2010, we issued options,
pursuant to terms of a consulting agreement for software design services, to a
consultant to purchase 55,000 shares of our common stock at an exercise price of
$0.05 per share, of which options 10,000 vested immediately and the remainder
vest in equal monthly installments of 5,000 options through September 2010
pursuant to the terms of the software design services contract.  In June 2009, we issued options under
our 2009 Plan to purchase 160,000 shares of our common stock at an exercise
price of $0.13 per share to a consultant engaged in providing strategic advisory
services to our company, of which options 30,000 were vested as of June 30,
2009.  The remaining options were forfeited by the consultant due to his
termination.  The options expired on December 31, 2010.  During the
second quarter of 2009, we recorded expense of approximately $3,800 related to
the fair value of the options, which was determined using the Black-Scholes
model using the following assumptions:  stock price of $0.13 (based on
closing price on date of grant), volatility of 162%, risk free rate of 0.56%,
expected term of 1.5 years, dividend yield of 0.0%. In June 2009,
we issued options under our 2009 Plan to purchase 1,000,000 shares of our common
stock at an exercise price of $0.001 to our former Chief Development Officer,
who was engaged in software development.  The options vested as follows:
 1/3 vested immediately, and the remainder vested monthly over two years
beginning June 1, 2008.  Through December 31, 2010, we recorded expense of
approximately $129,700 related to the fair value of the options, which was
determined using the Black-Scholes model using the following assumptions:
 stock price of $0.13, volatility of 162%, risk free rate of 3.40%,
expected term of 5.75 years, dividend yield of 0.0%.  The options expire on
May 15, 2019. In June 2009,
we issued options under our 2009 Plan to purchase 1,000,000 shares of our common
stock at an exercise price of $0.001 to Armada Capital, who was engaged in
providing advisory services to the Company.  The options vested as follows:
 1/3 vested immediately, and the remainder vested monthly over two years
beginning June 1, 2008.  Through December 31, 2010, we recorded expense of
approximately $129,700 related to the fair value of the options, which was
determined using the Black-Scholes model using the following assumptions:
 stock price of $0.13, volatility of 162%, risk free rate of 3.40%,
expected term of 5.75 years, dividend yield of 0.0%.  The options expire on
May 15, 2019. In June 2009,
we issued options under our 2009 Plan to purchase 1,500,000 shares of our common
stock at an exercise price of $0.001 to Brook Lang, who was engaged in providing
management services to the Company and is now the Companys CEO.  The
options vested as follows:  1/3 vested immediately, and the remainder
vested monthly over two years beginning June 1, 2008.  Through December 31,
2010, we recorded expense of approximately $195,000 related to the fair value of
the options, which was determined using the Black-Scholes model using the
following assumptions:  stock price of $0.13, volatility of 162%, risk free
rate of 3.40%, expected term of 5.75 years, dividend yield of 0.0%.  The
options expire on May 15, 2019. In August
2009, we issued options under our 2009 Plan to purchase 83,333 shares of our
common stock at an exercise price of $0.01 per share to a consultant engaged in
providing strategic advisory services to our company, which options vest
according to performance under the terms of the consulting agreement.  As
the options were immediately vested on the date of grant, we recorded expense of
approximately $12,500 during the third quarter of 2009 related to the fair value
of the options, which was determined using the Black-Scholes model using the
following assumptions:  stock price of $0.15, volatility of 162%, risk free
rate of 1.78%, expected term of three years, dividend yield of 0.0%.
  The options expire on August 15, 2014. In August
2009, we issued options under our 2009 Plan to purchase 60,000 shares of our
common stock at an exercise price of $0.01 per share to a consultant engaged in
providing strategic advisory services to our company, of which options 20,000
vested immediately and the remainder vest in equal monthly installments of 5,000
options through August 2010 pursuant to the terms of the advisory services
contract.  During the third quarter of 2009, we recorded expense of
approximately $500 related to the fair value of





the options, which was determined
using the Black-Scholes model using the following assumptions:  stock price
of $0.11, volatility of 162%, risk free rate of 1.78%, expected term of three
years, dividend yield of 0.0%.   The options expire on August 10,
2014. Warrants  On January 26,
2009, we entered into an agreement with Newport Capital for broker relations
services. Under the terms of the agreement, we issued a warrant to purchase
100,000 shares of our common stock at an exercise price of $0.80 and a warrant
to purchase 100,000 shares of our common stock at an exercise price of $1.00,
exercisable for two years.  The warrants vested immediately.  The
warrants were recorded as expense in 2009 at their fair value of approximately
$26,800, which was determined using the Black-Scholes model using the following
assumptions:  stock price of $0.20 (based on recent stock sales),
volatility of 162%, risk free rate of 0.47%, expected term of two years,
dividend yield of 0.0%. We evaluated the warrants and determined that the
warrants do not contain any provisions equivalent to net-cash settlement
provisions, and accordingly are accounted for as equity.  As noted above, on October 9, 2009, we
issued 1,000,000 units at $0.025 per unit for gross proceeds of $25,000, with
each unit comprised of one share of our common stock and a two-year warrant to
purchase two shares (2,000,000 total) of our common stock at $0.10 per share.
 The warrants were immediately exercisable.  We evaluated the warrants
and determined that the warrants do not contain any provisions equivalent to
net-cash settlement provisions, and accordingly are accounted for as equity.  On May 10, 2010, we entered into an
agreement with a consultant for financial and business advisory services.
 Under the terms of the agreement, we issued a five-year fully-vested
warrant to purchase up to 200,000 shares of our common stock at an exercise
price of $0.01 and on May 31, 2010, we issued a five-year fully vested warrant
to purchase up to 100,000 shares of our common stock at an exercise price to the
consultant for services rendered under the agreement.  The warrants were
recorded as expense in the second quarter of 2010 at their fair value of
approximately $3,000, which was determined using the Black-Scholes model using
the following assumptions:  stock price of $0.01, volatility of 162%, risk
free rate of 2.26%, expected term of 5 years, dividend yield of 0.0%.  We
evaluated the warrants and determined that the warrants do not contain any
provisions equivalent to net-cash settlement provisions, and accordingly are
accounted for as equity.  Additional warrants were granted during July and
August 2010 to this consultant pursuant to the terms of the consulting
agreement.  During July 2010, we issued five-year warrants to purchase an
additional 500,000 shares of our common stock at an exercise price of $0.01 per
share for financial and advisory services to the same consultant.  The
warrants were recorded as expense in the third quarter of 2010 at their fair
value of approximately $6,000, which was determined using the Black-Scholes
model using the following assumptions:  stock price of $0.01, volatility of
162%, risk free rate of 2.26%, expected term of 5 years, dividend yield of 0.0%.
 We evaluated the warrants and determined that the warrants do not contain
any provisions equivalent to net-cash settlement provisions, and accordingly are
accounted for as equity.  On August 2, 2010, the consulting
agreement was amended to provide for the issuance to the consultant of 20% of
any shares or warrants issued under an August 2010 agreement with a public
relations and marketing consulting firm.  Accordingly, in August 2010, we
issued two-year warrants to purchase an additional 220,000 shares of our common
stock at an exercise price of $0.001 per share to the consultant under the terms
of the consulting agreement, as amended and two-year warrants to purchase an
additional 140,000 shares of our common stock at an exercise price of $0.05 per
share under the terms of the consulting agreement, as amended (see below).
 The warrants were recorded as expense in the third quarter of 2010 at
their fair value of approximately $4,000, which was determined using the
Black-Scholes model using the following assumptions:  stock price of $0.01,
volatility of 162%, risk free rate of 0.56%, expected term of 2 years, dividend
yield of 0.0%.  We evaluated the warrants and determined that the warrants
do not contain any provisions equivalent to net-cash settlement provisions, and
accordingly are accounted for as equity.  Under a success-based arrangement
discussed below, two-year warrants to purchase an additional 500,000 shares of
our common stock at an exercise price of $0.05 per share and two year warrants
to purchase an additional 500,000 shares of our common stock at an exercise
price of $0.10 per share are also potentially issuable to the consultant.  In August 2010, we entered into an
annual contract with a public relations and marketing consulting firm for
services.  Under the terms of the contract, we issued two-year warrants to
purchase 400,000 shares of our common stock at an exercise price of $0.001 to
the consulting firm for services.  In addition, we are required to make
monthly cash payments of $10,000, with the first two months cash payments
deferred for two months.  In August 2010, we issued two-year warrants to
purchase 700,000 shares of our common stock at an exercise price of $0.001 per
share for public relations and marketing services to the same public relations
and marketing consulting firm. In addition, in August 2010, we issued additional
two-year warrants to purchase 700,000 shares of our common stock at an exercise
price of $0.05 to the same consulting firm for services under the agreement.
 The warrants were recorded as expense in the third quarter of 2010 at
their fair value of approximately $21,000, which was determined using the
Black-Scholes model using the following assumptions:  stock price of $0.01,
volatility of 162%, risk free rate of 0.53%, expected term of 2 years, dividend
yield of 0.0%.  We evaluated the warrants and determined that the warrants
do not contain any provisions equivalent to net-cash settlement provisions, and
accordingly are accounted for as equity.  In addition, we agreed to a
success-fee arrangement with the public relations and marketing consulting firm,
under which if certain performance criteria met, two-year warrants to purchase
2,500,000 shares of our common stock at an exercise price of $0.05





per share and two-year warrants to purchase 2,500,000
shares of our common stock at an exercise price of $0.10 per share are
potentially issuable to the consulting firm as a success fee.  As disclosed in Note 4, in August and
September 2010, we entered into convertible promissory notes in the aggregate
amount of $40,000 together with two-year warrants to purchase 3,750,000 shares
of our common stock at an exercise price of $0.02 per share.  The
promissory notes bear interest at a rate of 12% per annum, and the notes are due
in one year.  Upon default, the interest rate is 18%.  As the Company
is currently seeking to raise financing under a private placement transaction,
the promissory notes contain an optional conversion clause whereby, during a
30-day period after the completion of such private placement transaction raising
in excess of $250,000, the holders may either convert the promissory note at the
share price of such private placement transaction or demand repayment out of the
proceeds of such financing.  Under the terms of the promissory note
agreement, if the share price of such private placement is below $0.02 (the
strike price of the warrants), the strike price of the warrants will be downward
adjusted to such share price of the private placement. In accordance with the
authoritative guidance related to instruments with down-round protection, we
recorded a fair value liability of $16,800 at issuance.  The fair value
liability is revalued quarterly utilizing Black-Scholes valuation model
computations with the increase or decrease in fair value being reported in the
statement of operations as other income (expense). At September 30, 2010, the
Black-Scholes assumptions utilized were as follows:  stock price of $0.02,
volatility of 162%, risk-free rate of 0.53%, expected life of 2 years, dividend
yield of 0.0% and we recorded an increase in the fair value liability of
approximately $38,000 for the three months ended September 30, 2010 as other
expense.  At December 31, 2010, the Black-Scholes assumptions utilized were
as follows:  stock price of $0.02, volatility of 162%, risk-free rate of
0.61%, expected life of 1.75 years, dividend yield of 0.0% and we recorded a
decrease in the fair value liability of approximately $11,700 for the three
months ended December 31, 2010 as other income.  As disclosed in Note 4, in September
2010, we transferred $20,000 of accounts payable due to our CEO to a third
party.  These amounts were then converted into a convertible promissory
note for $20,000 together with two-year warrants to purchase 1,500,000 shares of
our common stock at an exercise price of $0.02 per share.  The promissory
note bears interest at a rate of 12% per annum, and the note is due in one year.
 Upon default, the interest rate is 18%.  As the Company is currently
seeking to raise financing under a private placement transaction, the promissory
note contains an optional conversion clause whereby, during a 30-day period
after the completion of such private placement transaction raising in excess of
$250,000, the holder may either convert the promissory note at the share price
of such private placement transaction or demand repayment out of the proceeds of
such financing.  Under the terms of the promissory note agreement, if the
share price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement. In accordance with the authoritative
guidance related to instruments with down-round protection, we recorded a fair
value liability of approximately $8,300 at issuance.  The fair value
liability is revalued quarterly utilizing Black-Scholes valuation model
computations with the increase or decrease in fair value being reported in the
statement of operations as other income (expense). At September 30, 2010, the
Black-Scholes assumptions utilized were as follows:  stock price of $0.02,
volatility of 162%, risk-free rate of 0.53%, expected life of 2 years, dividend
yield of 0.0% and we recorded an increase in the fair value liability of
approximately $19,000 for the three months ended September 30, 2010 as other
expense.  At December 31, 2010, the Black-Scholes assumptions utilized were
as follows:  stock price of $0.02, volatility of 162%, risk-free rate of
0.61%, expected life of 1.75 years, dividend yield of 0.0%.  We recorded a
decrease in the fair value liability of approximately $5,900 for the three
months ended December 31, 2010 as other income.  As disclosed in Note 4, in October
2010, we transferred $25,000 of accounts payable due to our CEO to a third
party.  These amounts were then converted into a convertible promissory
note for $25,000 at a stated interest rate of 12%, together with two-year
warrants to purchase 1,875,000 shares of our common stock at an exercise price
of $0.02 per share. The promissory note is due within one year.   Upon
default, the interest rate is 18%.  As the Company is currently seeking to
raise financing under a private placement transaction, the promissory note
contains an optional conversion clause whereby, during a 30-day period after the
completion of such private placement transaction raising in excess of $250,000,
the holder may either convert the promissory note at the share price of such
private placement transaction or demand repayment out of the proceeds of such
financing.  Under the terms of the promissory note agreement, if the share
price of such private placement is below $0.02 (the strike price of the
warrants), the strike price of the warrants will be downward adjusted to such
share price of the private placement. In accordance with the authoritative
guidance related to instruments with down-round protection, we recorded a fair
value liability of $25,000 at issuance.  The fair value liability is
revalued quarterly utilizing Black-Scholes valuation model computations with the
increase or decrease in fair value being reported in the statement of operations
as other income (expense).  At December 31, 2010, the Black-Scholes
assumptions utilized were as follows:  stock price of $0.02, volatility of
162%, risk-free rate of 0.61%, expected life of 1.75 years, dividend yield of
0.0% and we recorded an increase in the fair value liability of approximately
$1,900 for the three months ended December 31, 2010 as other expense.  As disclosed in Note 4, in October and
December 2010, we entered into convertible promissory notes in the aggregate
amount of $37,500 together with two-year warrants to purchase 2,812,500 shares
of our common stock at an exercise price of $0.02 per share.  The
promissory notes bear interest at a rate of 12% per annum, and the notes are due
in one year.  Upon default, the interest rate is 18%.  As the Company
is currently seeking to raise financing under a private placement transaction,
the promissory notes contain an





optional conversion clause whereby, during a 30-day
period after the completion of such private placement transaction raising in
excess of $250,000, the holders may either convert the promissory note at the
share price of such private placement transaction or demand repayment out of the
proceeds of such financing.  Under the terms of the promissory note
agreement, if the share price of such private placement is below $0.02 (the
strike price of the warrants), the strike price of the warrants will be downward
adjusted to such share price of the private placement. In accordance with the
authoritative guidance related to instruments with down-round protection, we
recorded a fair value liability of $28,000 at issuance.  The fair value
liability is revalued quarterly utilizing Black-Scholes valuation model
computations with the increase or decrease in fair value being reported in the
statement of operations as other income (expense).  At December 31, 2010,
the Black-Scholes assumptions utilized were as follows:  stock price of
$0.02, volatility of 162%, risk-free rate of 0.61%, expected life of 1.75 years,
dividend yield of 0.0% and we recorded an increase in the fair value liability
of approximately $12,300 for the three months ended December 31, 2010 as other
expense.  In December 2010, we entered into a
convertible promissory note in the aggregate amount of $25,000 together with
two-year warrants to purchase 1,875,000 shares of our common stock at an
exercise price of $0.02 per share, whereby we received $20,000 in cash and an
April 2010 promissory note for $3,000, an August 2010 $1,000 promissory note and
$1,000 in accounts payable to the same party were settled.  The December
2010 promissory note bears interest at a rate of 12% per annum, and the note is
due in one year.  Upon default, the interest rate is 18%.  As the
Company is currently seeking to raise financing under a private placement
transaction, the promissory note contains an optional conversion clause whereby,
during a 30-day period after the completion of such private placement
transaction raising in excess of $250,000, the holder may either convert the
promissory note at the share price of such private placement transaction or
demand repayment out of the proceeds of such financing.  Under the terms of
the promissory note agreement, if the share price of such private placement is
below $0.02 (the strike price of the warrants), the strike price of the warrants
will be downward adjusted to such share price of the private placement. In
accordance with the authoritative guidance related to instruments with
down-round protection, we recorded a fair value liability of approximately
$25,000 at issuance.  The fair value liability is revalued quarterly
utilizing Black-Scholes valuation model computations with the increase or
decrease in fair value being reported in the statement of operations as other
income (expense). At December 31, 2010, the Black-Scholes assumptions utilized
were as follows:  stock price of $0.02, volatility of 162%, risk-free rate
of 0.61%, expected life of 2 years, dividend yield of 0.0%.  We recorded an
increase in the fair value liability of approximately $3,100 for the three
months ended December 31, 2010 as other expense.  The following summarizes warrant
activity during the year ended December 31, 2010 (in thousands):  Warrants
outstanding, December 31, 2009


2,200Warrants
issued


14,023Warrants
exercised


Warrants
expired


Warrants
outstanding, December 31, 2010


16,223Weighted
average exercise price, December 31, 2010

$
0.04  Note 6.   Related Party
Transactions  As disclosed in Note 4, in
September 2010, we transferred $20,000 of accounts payable due to our CEO to a
third party.  These amounts were then converted into a convertible
promissory note for $20,000 together with two-year warrants to purchase
1,500,000 shares of our common stock at an exercise price of $0.02 per share.
 The promissory note bears interest at a rate of 12% per annum, and the
note is due in one year.  Upon default, the interest rate is 18%.  As
the Company is currently seeking to raise financing under a private placement
transaction, the promissory note contains an optional conversion clause whereby,
during a 30-day period after the completion of such private placement
transaction raising in excess of $250,000, the holder may either convert the
promissory note at the share price of such private placement transaction or
demand repayment out of the proceeds of such financing.  Under the terms of
the promissory note agreement, if the share price of such private placement is
below $0.02 (the strike price of the warrants), the strike price of the warrants
will be downward adjusted to such share price of the private placement.
  See Note 4.  As disclosed in Note 4, in October
2010, we transferred $25,000 of accounts payable due to our CEO to a third
party.  These amounts were then converted into a convertible promissory
note for $25,000 at a stated interest rate of 12%, together with two-year
warrants to purchase 1,875,000 shares of our common stock at an exercise price
of $0.02 per share. The promissory note is due within one year.   Upon
default, the interest rate is 18%.  As the Company is currently seeking to
raise financing under a private placement transaction, the promissory notes
contain an optional conversion clause whereby, during a 30-day period after the
completion of such private placement transaction raising in excess of $250,000,
the holders may either convert the promissory note at the share price of such
private placement transaction or demand repayment out of the proceeds of such
financing.  Under the terms of the promissory





note agreement, if the share price of such private
placement is below $0.02 (the strike price of the warrants), the strike price of
the warrants will be downward adjusted to such share price of the private
placement. See Note 4.  In June 2009, we entered into an
employment agreement with our CEO, pursuant to which, among other things, the
CEO will be entitled to annual base compensation at up to $196,000, an annual
bonus of up to 50% of base compensation (with actual amount to be determined by
our board of directors) and a grant of options to purchase 7,500,000 shares of
our common stock.  The options vest in 1/60 monthly installments beginning
January 1, 2009, over a period of five years.  Pursuant to the employment
contract, we are also required to issue the CEO additional options to purchase
shares of our common stock over a three-year period to maintain the executives
percentage ownership in our common stock on a fully diluted basis at 10% of the
Company.  In December 2010, the provision with respect to the requirement
to issue the CEO additional options to purchase shares of our common stock to
maintain the executives percentage ownership in our common stock on a fully
diluted basis at 10% of the Company was extended additional 12-months.  As
a result of this provision, as previously discussed at Note 5, options to
purchase 691,360, 739,729, 1,345,000 and 125,641shares of our common stock at an
exercise price of $0.001 were granted pursuant to our CEOs employment contract
as of March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010,
respectively.  The options were fully vested on the date of grant.  At December 31, 2010 and December 31,
2009, approximately $534,000 and $302,000, which represented amounts due to our
CEO, were included in accounts payable - related parties on the accompanying
balance sheet.  As discussed in Note 5, on June 15,
2009, we issued options under the 2009 Plan to purchase 1,500,000 shares of our
common stock to our CEO outside of his employment agreement.  Options to
purchase 1,000,000 shares of our common stock were immediately vested as of the
date of grant.  The remainder vested in monthly installments of 41,667
through June 2010.  The options have a term of ten years.  On December
31, 2009, we issued options under the 2009 Plan to purchase 7,500,000 shares of
our common stock at an exercise price of $0.001 per share to our CEO pursuant to
his employment agreement.  The options vest in 1/60 monthly installments
beginning January 1, 2009, over a period of five years.  The options have a
term of ten years. As discussed
in Note 5, above, on May 19, 2009, we issued 1,333,333 shares of our common
stock to our former Chief Development Officer (CDO) for reduction of accounts
payable of $100,000.  The shares when issued had an estimated fair value of
approximately $173,300 based on the closing market prices on the issue dates,
and as a result, we recorded additional expense of approximately $73,300 in the
second quarter of 2009.  As discussed in Note 5, above, in June 2009, we
issued options under our 2009 Plan to purchase 1,000,000 shares of our common
stock at an exercise price of $0.001 to our former CDO, who was engaged in
software development.  The options vested as follows:  1/3 vested
immediately, and the remainder vested monthly over two years beginning June 1,
2008.  The options expire on May 15, 2019.  At December 31, 2010 and
December 31, 2009, approximately $114,000 and $42,000, which represented amounts
due to a company owned by our former CDO, were included in accounts payable 
related parties on the accompanying balance sheet. In September 2008, we entered into a
promissory note with a stockholder in the principal amount of $25,000 with a
stated interest rate of 12%.  Note 7.  Income
Taxes  Deferred
income tax assets and related valuation allowances are as follows as of December
31 (in thousands): Deferred tax assets



2010


2009Net operating loss carryforwards


$
701

$
652Other



897


3611,598


1,013Valuation allowance



(1,598)


(1,013)Deferred tax assets, net of
allowance


$
-

$
-  The difference
between taxes computed by applying the U.S. federal corporate tax rate of 34%
and the actual income tax provisions in 2010 and 2009 is primarily the result of
establishing a valuation allowance on the deferred tax assets. The valuation
allowance increased approximately $585,000 and $651,000 during 2010 and 2009,
respectively. At December 31, 2010, we had a net operating loss
carryforwards for federal income tax reporting purposes of approximately $2.1
million, which are available to offset future taxable income, and expire
beginning in 2030 if not otherwise utilized. Our ability to use





such net operating losses is
dependent on future taxable income and could be subject to an annual limitation
due to change of control provisions under Sections 382 and 383 of the Internal
Revenue Code.  Note 8.  Commitments and
Contingencies  Acxiom
CorporationIn February 2010, we entered into a database
license agreement with Acxiom Corporation under which we will license their
InfoBase-X telephone directories commencing February 5, 2010 for an initial term
of six months (Initial Term).  In October 2010, we amended our agreement
with Acxiom whereby the Initial Term will extend for an additional six months.
 Unless terminated, the license term automatically extends to a period of
one year (First One Year Term), and will continue to automatically renew for
successive one-year terms (Renewal Term) unless terminated by either party
upon 30 days notice or for cause as defined in the agreement.  In
consideration of the license grant, we will pay no fees for the Initial Term,
and will pay annual minimum fees of $30,000 for the First One Year Term and any
Renewal Term, payable monthly at a rate of $2,500 per month, plus certain
additional per-click volume-based fees, based upon the following schedule:  Volume-Based FeesUp to 2,500,000
$
-2,500,001  5,000,000

0.0105,000,001  7,500,000

0.0087,500,001  unlimited

-  infoUSA,
Inc. In April 2009, we entered into a three-year database license
agreement with infoUSA, Inc. under which we licensed their Yellow Pages database
commencing April 15, 2009. In consideration of the license grant, we will pay
the greater of royalties calculated at $0.15 per user per month or calculated
based on transaction volume, or annual minimum license fees of $100,000 for the
first year and $125,000 for the second year of the agreement and thereafter.
 The agreement automatically renews for an additional two year term unless
terminated upon 60-day notice by either party.  Minimum fees under this
agreement totaled $67,000 through December 31, 2009.  The remaining first
year fees of $33,000 were due as of March 31, 2010.  We terminated this
agreement effective January 19, 2010 and our remaining liability with InfoUSA,
Inc. is $75,000 as of December 31, 2010. Robert
Half International In August 2009, Robert Half International sued us
claiming unpaid fees for services rendered.  On February 24, 2010, a
judgment was granted against us in the amount of $87,248.91, which amount bears
interest at 12% per annum.  We have included the judgment, net of payment
of approximately $15,000, in accounts payable at December 31, 2010 and at
approximately $87,000 at December 31, 2009.  On June 24, 2010, we entered
into a settlement and forbearance agreement with Robert Half International,
whereby Robert Half International agreed not to pursue the judgment against us
as long as we continued to make payments as follows:  on August 1, 2010,
$10,000.00; and $10,000 thereafter on the first day of every month until the
amount of $74,000 is paid in full.  We have not made the payments as
indicated under the terms of the settlement and forbearance agreement and as a
result, there is no assurance that Robert Half International will not pursue
judgment against us. Moody
Capital In April 2010, we entered into an agreement with Moody Capital for
investment banking services.  Under the agreement, Moody Capital will
receive upon the placement of debt or equity, an 8% cash fee and 5% warrant
coverage with an exercise price equal to 1.05 times the offering price of the
equity transaction.   We may terminate this agreement within 30 days
upon giving written notice. Note 9.  Subsequent
Events  In February 2011, we entered into a
convertible promissory note in the amount of $25,000 together with two-year
warrants to purchase 1,875,000 shares of our common stock at an exercise price
of $0.02 per share.  The promissory note bears interest at a rate of 12%
per annum, and the note is due in one year.  Upon default, the interest
rate is 18%.  As the Company is currently seeking to raise financing under
a private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $950,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $750,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.





In March 2011, we entered into a
convertible promissory note in the amount of $5,000 together with two-year
warrants to purchase 375,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $250,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.  In March and April 2011, we issued
fully vested five-year warrants to purchase an aggregate of 840,000 shares of
our common stock at an exercise price of $0.001 per share for financial and
advisory services to a consultant.  In the first quarter of 2011, an
aggregate of 165,000 shares of our common stock were issued or issuable to
consultants for services provided during the three months ended March 31,
2011.  In April 2011, we entered into a
convertible promissory note in the amount of $10,000 together with two-year
warrants to purchase 750,000 shares of our common stock at an exercise price of
$0.02 per share.  The promissory note bears interest at a rate of 12% per
annum, and the note is due in one year.  Upon default, the interest rate is
18%.  As the Company is currently seeking to raise financing under a
private placement transaction, the promissory note contains an optional
conversion clause whereby, during a 30-day period after the completion of such
private placement transaction raising in excess of $250,000, the holder may
either convert the promissory note at the share price of such private placement
transaction or demand repayment out of the proceeds of such financing.
 Under the terms of the promissory note agreement, if the share price of
the first $250,000 of such private placement is below $0.02 (the strike price of
the warrants), the strike price of the warrants will be downward adjusted to
such share price of the private placement.





**ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE**. On April 9, 2010, the Board of
Directors appointed Peterson Sullivan LLP (PSCPA) as Montavos
independent auditors for the Company, replacing Malone & Bailey PC
(Malone).  On April 9, 2010, the Company
dismissed Malone, effective April 9, 2010.  The report of Malone on the
Companys financial statements for the years ended December 31, 2008 and 2007,
and the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009,
did not contain an adverse opinion or a disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope, or accounting principles,
except that such reports on our financial statements contained an explanatory
paragraph with respect to uncertainty as to the Companys ability to continue as
a going concern.  For the years ended December 31, 2008
and 2007, and through April 9, 2010, there have been no disagreements with
Malone on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to Malones satisfaction, would have caused them to make reference to the
subject matter of the disagreement in connection with their reports.  For
the years ended December 31, 2008 and 2007, and through April 9, 2010, there
were no reportable events as that term is described in Item
304(a)(1)(v) of Regulation S-K.   ITEM
9A.  CONTROLS AND PROCEDURES (a)  Disclosure Controls and
Procedures.  As of the end of the period covered by this Annual Report on
Form 10-K, we carried out an evaluation, under the supervision and with the
participation of senior management, including Mr. Brook W. Lang, our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and operation of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the Exchange Act).  Based
upon that evaluation, our CEO/CFO concluded that our disclosure controls and
procedures were not effective in recording, processing, summarizing and
reporting, on a timely basis, information required to be disclosed by us in the
reports that we file or submit under the Exchange Act.  A discussion of the
material weaknesses in our controls and procedures is described below.  (b)  Internal Control over Financial Reporting.
 There have been no changes in our internal controls over financial
reporting or in other factors during the fourth fiscal quarter ended December
31, 2010, that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting subsequent to the date we
carried out our most recent evaluation.  (c)  Management Report on Internal Control.
 Management is responsible for establishing and maintaining adequate
internal control over financial reporting.  Internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act, is a process designed by, or under the supervision of, our
CEO/CFO, or persons performing similar functions, and effected by our board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.  Our management, with the participation of our
CEO/CFO, has established and maintained policies and procedures designed to
maintain the adequacy of our internal control over financial reporting, and
include those policies and procedures that:  · pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets;  · provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of our
management and directors; and  · provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.  Management has used the framework set
forth in the report entitledInternal Control  Integrated
Framework published by the Committee of Sponsoring Organizations (COSO) of
the Treadway Commission to evaluate the effectiveness of our internal





control over financial reporting.  As a result of
the material weaknesses described below, management has concluded that our
internal control over financial reporting was not effective as of December 31,
2010.  Managements Assessment  Management has determined that, as of the December 31,
2010, evaluation date, there were deficiencies in both the design and the
effectiveness of our internal control over financial reporting.  Management
has assessed these deficiencies and determined that there were various material
weaknesses in our internal control over financial reporting.  As a result
of our assessment that material weaknesses in our internal control over
financial reporting existed as of December 31, 2010, management has concluded
that our internal control over financial reporting was not effective as of
December 31, 2010.  The existence of a material weakness or weaknesses is
an indication that there is a more than remote likelihood that a material
misstatement of our financial statements will not be prevented or detected in a
future period.  Management has assigned a high priority to the short- and
long-term improvement of our internal control over financial reporting.  We
have listed below the nature of the material weaknesses we have identified, the
steps we are taking to remediate these material weaknesses and when we expect to
have the material weaknesses remediated.  Inadequate entity-level
controls.  As of December 31, 2010, we did not have
effective entity level controls with respect to our overall control environment
and monitoring efforts as defined in the COSO framework.  The pervasive
nature of the material weaknesses in our internal control over financial
reporting in itself constitutes a material weakness.  We failed to
systematically communicate company-wide policies and procedures and to uniformly
and consistently communicate the importance of controls.  We also had
failed to implement processes to ensure periodic monitoring of our internal
control activities.  As a result, management concluded that there are
deficiencies in the design and execution of our entity-level controls that
constitute a material weakness in our internal control over financial reporting
and errors in our financial statements that have not been prevented by our
entity level controls could occur.  · Remediation.  In April
2010, we retained accounting consultants to advise our company on improving
internal controls and procedures.  In addition, we retained new legal
counsel to advise on disclosure requirements and new independent registered
public accountants to audit our financial statements.  Under the guidance
of our CEO and new legal and financial advisors, we began to implement new
controls and procedures designed to ensure that company-wide policies and
procedures are systematically communicated and that documentation evidencing
employees receipt thereof is retained.  In the second quarter of 2010, we
also began developing an ongoing monitoring system to facilitate continuous
monitoring of our internal control over financial reporting.  · Timing.  We are
continuing to remediate these deficiencies and anticipate completing our
remediation efforts during the third quarter 2011.  Deficiencies pertaining to
inadequate segregation of duties consistent with control objectives.
 The lack of segregation of duties among management resulted in
deficiencies in our financial reporting.  · Remediation.  We retained
accounting consultants to assist the company in meeting its control objectives.  · Timing. We are continuing to
remediate these deficiencies and anticipate completing our remediation efforts
during the third quarter 2011.  Deficiencies pertaining to
insufficiently skilled personnel and a lack of human resources within our
finance and accounting reporting functions.  The lack of
appropriately skilled personnel could result in material misstatements to
financial statements not being detected in a timely manner.  · Remediation.
 As discussed above, we retained accounting consultants to assist our
finance and accounting reporting functions.  · Timing.
 We are continuing to remediate these deficiencies and anticipate
completing our remediation efforts during the third quarter 2011.





Insufficient
oversight of financially significant processes and systems, including
deficiencies relating to monitoring and oversight of the work performed by our
finance and accounting personnel.  Due primarily to the lack of human
resources in our accounting and finance department during 2009 and 2010, we
noted deficiencies related to insufficient review and approval and documentation
of the review and approval of the work being performed by employees within our
accounting and finance department relating to the following matters:  · All journal entries;  · Periodic reconciliations of sub
ledgers, balance sheet and income statement accounts;  · Accrual of
expenses; · Documents
supporting the monthly, quarterly and annual general ledger closing process;
and · Periodic financial reporting.  As a result, we do not have
sufficient internal control over financial reporting to ensure underlying
transactions are being appropriately and timely accounted for, which could lead
to material misstatements in the financial statements not being detected in a
timely manner.  · Remediation.
 As discussed above, we retained accounting consultants to assist our
finance and accounting reporting functions.  · Timing.
 We are continuing to remediate these deficiencies and anticipate
completing our remediation efforts during the third quarter 2011.  Deficiencies relating to
insufficient analysis, documentation and review of the selection and application
of generally accepted accounting principles, or GAAP, to significant non-routine
transactions, including the preparation of financial statement disclosures
relating thereto.  We did not have appropriate personnel in
place at December 31, 2010, to review and document the application of GAAP to
significant non-routine transactions, including the preparation of related
financial statement disclosures.  As a result, we do not have sufficient
internal control over financial reporting to ensure that underlying non-routine
transactions are appropriately and timely accounted for in the general
ledger.  · Remediation.
 As discussed above, we retained accounting consultants to assist our
finance and accounting reporting functions. · Timing.
 We are continuing to remediate these deficiencies and anticipate
completing our remediation efforts during the third quarter 2011.  Inability
to demonstrate through testing that our internal control over financial
reporting was effective as of December 31, 2010.  We were
unable to demonstrate through testing the effectiveness of our remediation
efforts with respect to the material weaknesses described above.  Our
processes with respect to quarterly and annual controls, such as our control
processes relating to general ledger close procedures and periodic financial
reporting, were not implemented as of the year ended December 31, 2010.  · Remediation.
 We have dedicated significant internal and external resources to our
remediation efforts with respect to material weaknesses in our internal control
over financial reporting as noted above.  We expect to have a sufficient
sampling base to enable us to test the effectiveness of our remediation efforts
at future measurement dates and testing periods for our internal control over
financial reporting. · Timing.
 Due to lack of financial resources, management was unable to fully
implement its remediation efforts nor test the effectiveness of our remediation
efforts with respect to the remediation efforts described above.  We expect
to complete the testing of effectiveness in 2011. The steps described above, including
the hiring of additional qualified accounting and finance personnel, are
designed to ensure that managements evaluation of our internal control over
financial reporting is thorough and complete and that a timely and appropriate
remediation plan is implemented.  The effectiveness of the steps we have
taken to date and the steps we are still in the





process of completing is subject to continued management
review, as well the oversight of our board of directors, and we may make
additional changes to our internal controls and procedures.  Although we
have undertaken the foregoing initiatives, in the future we may identify further
material weaknesses or significant deficiencies in our internal control over
financial reporting that have not previously been identified.  Management estimates that we will
incur additional costs in connection with our remediation efforts including
outside advisor fees and incremental personnel costs.  Management estimates
that these costs will aggregate approximately $25,000 for the year ended
December 31, 2011.  There were no changes in our disclosure controls and
procedures, including our internal control over financial reporting, during the
quarter ended December 31, 2010, that had materially affected, or are
reasonably likely to materially affect, our disclosure controls and procedures,
including our internal control over financial reporting.   ITEM 9B.  OTHER
INFORMATION  None.    Part III      ITEM 10.  DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  The following
table sets forth the names and ages, as of March 31, 2011, of each of our
executive officers and directors:   Name

Age

Positions and OfficesBrook W. Lang

46

Chief Executive Officer of the Company since May
19, 2008, director since April 22, 2009  Set forth
below is biographical information concerning our executive officers and
directors.  Brook W. Lang has served
as our chief executive officer since May 8, 2008.  Mr. Lang is a seasoned
executive with over 20 years of experience in sales and marketing, financial
management, operations, and product development capacities in high tech
industries. In several executive, senior executive, sales and business
development, advisory, board and board advisory roles, Mr. Lang has conducted
business domestically in the U.S. and internationally in Europe and Asia
building company relationships and working with industry, trade and standards -
setting organizations.  In 2002, Mr. Lang worked for T-Mobile, a leading
provider of wireless telecommunications services.  In his position, he was
directly responsible for $800 million in yearly acquisition revenue and
co-managed a field sales-force of over 400 salespeople.  Prior to joining
T-Mobile, in 1998, Mr. Lang founded and served as CEO of Infomove, and their
spin-out division Biospin, a leading wireless technology company, growing the
company from the intellectual property development phase to securing funding
through to successful product launch.  In 2003, Mr. Lang worked through a
company called L & S on several executive projects in the wireless industry,
helping launch products and services to the wireless market in hardware,
services, content, games, retail, distribution and enterprise markets.  In
December of 2004, as part of these projects, Mr. Lang was actively recruited,
together with some of his own intellectual property, to help lead Montavo, Inc.,
a wireless Location Based Services (LBS) mobile application company focused on
the mobile search and advertising market.  Mr. Lang works closely with the
technology team to develop and evolve the technologies and is responsible for
marketing, distribution and branding for our applications, targeting national
and regional brand advertisers and small to medium sized local advertisers.
 Mr. Lang is also responsible for development of relationships with mobile
software aggregators and global wireless carriers, to offer private labeled
solutions and other mobile marketing solutions.   Mr. Lang holds a
Bachelors degree in Business Administration from the University of
Washington.  Composition of Board of
Directors  Our bylaws authorize no less than one
(1) and no more than thirteen (13) directors.  We currently have one (1)
director on our board of directors (the Board):  Brook W. Lang.  Term of Office





Our directors are appointed for a
one-year term to hold office until the next annual general meeting of our
shareholders or until removed from office in accordance with our
bylaws.  Our officers are appointed by the Board and hold office until
removed by the Board.  Family Relationships  None.  Director or Officer Involvement in Certain Legal
Proceedings  Except as otherwise indicated below,
to the best of our knowledge, our directors and executive officers were not
involved in any legal proceedings as described in Item 401(f) of Regulation S-K.  One of our officers, Mr. Lang, backed
funds that were to be paid to him by a partner company of ComRoad AG.
 Comroad AG failed, and as such, he was required in 2002 to file a planned
restructure bankruptcy.We are not
aware of any proceedings to which any of our officers or directors, or any
associate of any such officers or directors, is a party adverse to the
Registrant, the Company or any of our subsidiaries or has a material interest
adverse to us.  Section 16(a) Beneficial Ownership Reporting
Compliance  Our officers,
directors and shareholders owning greater than ten percent (10%) of our shares
are not required to file beneficial ownership reports pursuant to Section 16(a)
of the Securities and Exchange Act (the Exchange Act) because we do not have a
class of securities registered under Section 12 of the Exchange Act.  Committees of the Board  We do not currently have a
separately-designated nominating or compensation committee.  Due to the
size of our company and the size of the Board, our Board performs the functions
of these committees.  Audit Committee  We do not have a separately-designated
audit committee.  The entire Board performs the functions of an audit
committee, but no written charter governs the actions of the Board when
performing the functions of what would generally be performed by an audit
committee.  The Board approves the selection of our independent accountants
and meets and interacts with the independent accountants to discuss issues
related to financial reporting. In addition, the Board reviews the scope and
results of the audit with the independent accountants, reviews with management
and the independent accountants our annual operating results, considers the
adequacy of our internal accounting procedures and considers other auditing and
accounting matters including fees to be paid to the independent auditor and the
performance of the independent auditor.  Summary Compensation  The following Summary Compensation
Table sets forth certain information concerning the compensation of (ii) our
Chief Executive Officer/Chief Financial Officer, (ii) our other two most highly
compensated executive officers, and (iii) other personnel required to be
disclosed by this Item whose compensation exceeds $100,000, for each of the
years ended December 31, 2009 and 2010 (collectively, our named executive
officers).  SUMMARY
COMPENSATION TABLEName
and
principal
position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings ($)
All
Other
Compensation
($)
Total
($)Brook W.
Lang(1)
Chief Executive
Officer and Director





2009
2010
0
0
0
0
0
0
236,900(2)
173,300(4)
0
0
0
0
323,400 (3)
323,400 (3)
560,300
496,700Brian
Conte(5)
Former Chief
Development Officer
2009
2010
0
0
0
0
0
0
108,000(6)
21,600(6)
0
0
0
0
73,300(7)
73,900(5)
181,300
95,500   (1) On May 8, 2008, Brook W. Lang was
appointed CEO and he was appointed to the Board of Directors on April 22,
2009.  (2) Amount is the result of options to
purchase 1,500,000 shares of our common stock at an exercise price of $0.001 per
share outside of his employment agreement.  Options to purchase 1,000,000
shares of our common stock were immediately vested as of the date of grant.
 The remainder vested in monthly installments of 41,667 through June 2010.
 The options have a term of ten years.  On December 31, 2009, we
issued options under the 2009 Plan to purchase 7,500,000 shares of our common
stock at an exercise price of $0.001 per share to our CEO pursuant to his
employment agreement.  The options vest in 1/60 monthly installments
beginning January 1, 2009, over a period of five years.  The options have a
term of ten years.See Note
3 to Notes to Financial Statements for a description regarding the valuation
methodology of stock based awards.  (3) The company has retained a company
called L & S, from which Mr. Lang receives compensation, for management
services & expenses.  These management services and expenses incurred
totaled approximately $323,000 in both 2009 and 2010.  (4) Amount is the result of further
vesting of options described in (2) above, as well as additional grants made
pursuant to Mr. Langs employment contract during 2010.  Pursuant to the
employment contract, we are required to issue Mr. Lang additional options to
purchase shares of our common stock over a three-year period to maintain his
percentage ownership in our common stock on a fully diluted basis at 10% of the
Company.  As a result of this provision, options to purchase 691,360,
739,729, 1,345,000 and 125,641 shares of our common stock at an exercise price
of $0.001 were granted to Mr. Lang as of March 31, 2010, June 30, 2010,
September 30, 2010 and December 31, 2010, respectively.  The options were
fully vested on the date of grant.  (5) Brian Conte was appointed Chief
Development Officer in May 2008.  Effective September 13, 2010, Mr. Conte
no longer serves as the Companys Chief Development Officer.  Mr. Conte was
compensated as a consultant.  (6) Amount is the result of options to
purchase 1,000,000 shares of our common stock at an exercise price of $0.001 per
share. Options to purchase 333,333 shares of our common stock were immediately
vested as of the date of grant.  The remainder vested in monthly
installments through beginning June 1, 2008 through June 2010.  The options
have a term of ten years.  (7) On May 19, 2009, we issued 1,333,333
shares of our common stock to Mr. Conte for reduction of accounts payable of
$100,000.  The shares when issued had an estimated fair value of
approximately $173,300 based on the closing market prices on the issue dates,
and as a result, we recorded additional expense of approximately $73,300 in the
second quarter of 2009.   Narrative Disclosure to the Summary Compensation
Table  Brook W. Lang Employment Agreement  In June 2009, we entered into an
employment agreement (the Lang Agreement) with our CEO, pursuant to which,
among other things, the CEO will be entitled to annual base compensation at up
to $196,000, an annual bonus of up to 50% of base compensation (with actual
amount to be determined by our board of directors) and a grant of options to
purchase 7,500,000 shares of our common stock.  Pursuant to the employment
contract, we are also required to issue the CEO additional options to purchase
shares of our common stock over a three-year period to maintain the executives
percentage ownership in the companys common stock on a fully diluted basis at
10% of the Company.  In December 2010, the provision with respect to the
requirement to issue the CEO additional options to purchase shares of our common
stock to maintain the executives percentage ownership in our common stock on a
fully diluted basis at 10% of the Company was extended additional 12-months.  On December 31, 2009, we issued
options under the 2009 Plan to purchase, over a five-year period, a total of
7,500,000 shares of our common stock at an exercise price of $0.001 per share to
our CEO pursuant to his employment agreement.  The options vest in 1/60
monthly installments beginning January 1, 2009, over a period of five years.
 The options have a term of ten years.





In the event that Mr. Langs
employment is terminated without cause or Mr. Lang chooses to terminate his
employment for good reason or upon a change of control, all options granted to
Mr. Lang pursuant to the Lang Agreement shall be fully vested and exercisable
upon such termination at a price of nil and shall remain exercisable in
accordance with the grant agreements.  In the event that Mr. Langs
employment is terminated by Mr. Lang for good reason or for any reason by the
Company other than cause, death or disability, Mr. Lang will receive an amount
equal to two years of his specified base salary and all other bonuses and
compensation at the rate in effect on the date of termination  Regardless of the nature of his
separation from the company, Mr. Lang will also receive salary, a pro-rated
amount of incentive cash compensation for the fiscal year in which the
termination occurs, pay for accrued but unused paid time off, and reimbursement
of expenses through the date of termination.  Although Mr. Lang has an employment
agreement, as discussed above, the Company has retained a company called L &
S, from which Mr. Lang receives compensation, for management services &
expenses.  These management services and expenses incurred totaled
approximately $323,000 in both 2009 and 2010.  Mr. Lang does not receive a
salary or bonus as an employee from the Company.  Outstanding Equity Awards At Fiscal Year-End  The following table provides
information related to outstanding equity awards for each of the Named Executive
Officers as of December 31, 2010:  OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
AWARDS

STOCK
AWARDSName (a)
Number of Securities Underlying Unexercised Options (#)
Exercisable (b)
Number of Securities Underlying Unexercised Options (#)
Unexercisable
(c)
Equity Incentive Plan Awards: Number of Securities Underlying
Unexercised Unearned Options (#)
(d)
Option Exercise Price
(e)
Option Expiration Date
(f)

Number of shares or Units of Stock That Have Not Vested
(#)
(g)
Market Value of Shares or Units of Stock That Have Not Vested
($)
(h)
Equity Incentive Plan Awards:  Number of Unearned
Shares, Units or Other Rights That Have Not Vested (#)
(i)
Equity Incentive Plan Awards:  Market or Payout Value of
Unearned Shares, Units or Other Rights That Have Not Vested ($)
(j)Brook W.
Lang
691,360(1)
739,729(1)
1,345,000(1)
125,641(1)
1,500,000(2)
3,000,000(3)
0
0
0
0
0
4,500,000
0
0
0
0
0
0
$0.001
$0.001
$0.001
$0.001
$0.001
$0.001
3/31/2020
6/30/2020
9/30/2020
12/31/2020
5/15/2019
12/31/2019

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0Brian
Conte(4)
1,000,000(5)
0
0
$0.001
5/15/2019

0
0
0
0   (1) Pursuant to the employment contract, we are required to
issue Mr. Lang additional options to purchase shares of our common stock over a
three-year period to maintain his percentage ownership in our common stock on a
fully diluted basis at 10% of the Company.  As a result of this provision,
options to purchase 691,360, 739,729, 1,345,000 and 125,641 shares of our common
stock at an exercise price of $0.001 were granted to Mr. Lang as of March 31,
2010, June 30, 2010, September 30, 2010 and December 31, 2010, respectively.
 The options were fully vested on the date of grant. (2) The options vested as follows:  1/3 vested
immediately, and the remainder vested monthly over two years beginning June 1,
2008. (3) The options vest in 1/60 monthly installments beginning
January 1, 2009, over a period of five years. (4) Brian Conte is our former Chief Development Officer. (5) The options vested as follows:  1/3 vested
immediately, and the remainder vested monthly over two years beginning June 1,
2008.





ITEM 12.  SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS  The following table sets forth, as of
March 31, 2011, the names, addresses and number of shares of our common stock
beneficially owned by (i) all stockholders known to us to be the beneficial
owner of more than five percent (5%) of our common stock, (ii) each member of
our board of directors, (iii) each of our named executive officers and (iv) all
of our directors and executive officers as a group.  Beneficial ownership of shares is determined under the
rules of the Securities and Exchange Commission and generally includes any
shares over which a person exercises sole or shared voting or investment power.
 For purposes of the following table, a person is deemed to have beneficial
ownership of any shares of common stock that such person has the right to
acquire within 60 days after the date of this prospectus.  For purposes of
computing the percentage of outstanding shares of our common stock held by each
person, any shares that such person has the right to acquire within 60 days
after the date of this prospectus are deemed to be outstanding, but are not
deemed to be outstanding for the purpose of computing the percentage ownership
of any other person.  Except as otherwise noted, the persons named in the
table have sole voting and investment power with respect to all of the shares of
common stock beneficially owned by them.  Unless otherwise indicated, the
address of each person listed is c/o Montavo, Inc., 4957 Lakemont Blvd, Suite
239, Bellevue, Washington 98006.  Percentage ownership in the following
table is based on 71,282,241 shares of common stock outstanding on March 31,
2011. PRINCIPAL
STOCKHOLDER TABLE  Title of
class
Name and
address of beneficial owner
Amount and
nature of
beneficial
ownership
Percent of
classCommon
Brook W.
Lang
7,776,730(1)
10.9%  (1) Includes 7,776,730 shares of common stock issuable upon
the exercise of options that vest within 60 days.  Excludes 4,125,000
shares of common stock issuable upon the exercise of options that do not vest
within 60 days.  Mr. Lang does not have voting and dispositive control over
the shares held by Tracie Lang.  Securities Authorized for Issuance under Equity
Compensation Plans  In 2005, we adopted the 2005 Stock
Option Plan (the 2005 Plan).  The 2005 Plan provided for the granting of
stock options to employees and consultants for services.  Options granted
under the 2005 Plan may be either incentive stock options or nonqualified stock
options.  Incentive stock options (ISO) may be granted only to employees
(including officers and directors who are also employees).  Nonqualified
stock options (NSO) may be granted to employees and consultants.  We
reserved 1,000,000 shares of common stock for issuance under the 2005 Plan.  In 2009, we adopted the 2009 Stock
Incentive Plan for Employees and Consultants (the 2009 Plan).  The 2009
Plan provided for the granting of stock options to employees and consultants for
services rendered to the Company.  Options granted under the 2009 Plan may
be either incentive stock options or nonqualified stock options.  Incentive
stock options (ISO) may be granted only to employees or consultants (including
officers and directors who are also employees).  Nonqualified stock options
may be granted to employees and consultants.  Under the 2009 Plan, up to
6,000,000 shares of our common stock may be issued to directors, employees or
consultants pursuant to share awards or options to purchase our common stock.
 We filed a form S-8 on June 12, 2009 to register the shares of common
stock issuable under the 2009 Plan.  On February 11, 2010, we amended our
2009 Plan and filed a revised Form S-8 increasing the number of reserved shares
to 15,000,000.  On May 7, 2010, we again amended our 2009 Plan and filed a
subsequent revision to the Form S-8, increasing the number of reserved shares to
35,000,000.  The following table summarizes the
number of shares of our common stock authorized for issuance under our equity
compensation plans as of December 31, 2010.





Plan
Category
(a)
Number
of
Securities to
be
Issued
Upon
Exercise of
Outstanding
Options
(b)
Weighted-
Average
Exercise
Price
of
Outstanding
Options
(c)
Number
of
Securities
Remaining
Available
for
Future
Issuance
Under
Equity
Compensation
Plans
(excluding
securities
reflected
in
column(a))qEquity
compensation plans approved by security holders
14,410,063
$0.004
20,589,937Equity
compensation plans not approved by security holders
-
-
-Total
14,410,063
$0.004
20,589,937     ITEM 13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE  At December 31, 2010 and 2009,
approximately $534,000 and $302,000, which represented amounts due to our CEO,
were included in accounts payable - related parties on the accompanying balance
sheet. On May 19,
2009, we issued 1,333,333 shares of our common stock to our former Chief
Development Officer for reduction of accounts payable of $100,000.  The
shares when issued had an estimated fair value of approximately $173,300 based
on the closing market prices on the issue dates, and as a result, we recorded
additional expense of approximately $73,300 in the second quarter of 2009.
 At December 31, 2010 and 2009, approximately $165,500 and $42,000, which
represented amounts due to our CDO, were included in accounts payable  related
parties on the accompanying balance sheet.  In September 2008, we entered into a
convertible promissory note with a shareholder in the principal amount of
$25,000 with a stated interest rate of 12%.  The note is convertible at the
option of the holder into shares of our common stock at $0.50 per share.  Director Compensation  We do not currently provide
compensation to our directors for serving on our board of directors.      ITEM 14.  
PRINCIPAL ACCOUNTING FEES AND SERVICES Audit Fees  The aggregate fees billed by our
auditors for professional services rendered in connection with a review of the
financial statements included in our quarterly reports on Form 10-Q and the
audit of our annual consolidated financial statements for the fiscal year ended
December 31, 2009 was approximately $25,000.  The aggregate fees billed by our
auditors for professional services rendered in connection with a review of the
financial statements included in our quarterly reports on Form 10-Q and the
audit of our annual consolidated financial statements for the fiscal year ended
December 31, 2010 was $62,221.  Audit-Related Fees  We were not billed any fees by our
auditors for professional services for audit-related services in the fiscal year
ended December 31, 2009 or 2010.  Tax Fees  We were not billed any fees by our
auditors for professional services for tax compliance, tax advice, and tax
planning in the fiscal years ended December 31, 2009 and 2010.





All Other Fees  We were not billed any fees by our
auditors for all other non-audit services in the fiscal years ended December 31,
2009 and 2010.  PART IV     ITEM 15.  EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES.  (a)(1)(2) Financial Statements.  The financial statements listed in the
Index to Financial Statements are filed as part of this Annual Report on Form
10-K, immediately following the signature page.  (a)(3) Exhibits.  The exhibits required by this item are
set forth on the Exhibit Index attached hereto.      3.1
Certificate of Incorporation (filed as Exhibit 3.1
to our registration statement on Form 10-SB filed with the SEC on February
8, 2000 (SEC File No. 000-29397) (the 2000 Form 10-SB) and incorporated
herein by reference).3.1.1
Certificate of Amendment (filed as Exhibit 3.1.1 to
our Current Report on Form 8K filed with the SEC on August 29, 2008, and
incorporated herein by reference).3.1.2
Certificate of Amendment (filed as Exhibit 3.1 to
our Current Report on Form 8K filed with the SEC on May 7, 2010, and
incorporated herein by reference).3.2
Bylaws (filed as Exhibit 3.2 to the 2000 Form 10-SB
and incorporated herein by reference).10.1
Employment Agreement with Craig Moody (filed as
Exhibit 10.3 to our Current Report on Form 8K filed with the SEC on
November 14, 2007, and incorporated herein by reference).10.2
Mutual Release Agreement with Craig Moody (filed as
Exhibit 10.2 to our Current Report on Form 8K filed with the SEC on May 9,
2008, and incorporated herein by reference).10.3
Agreement between North Coast Partners, Inc. (now
Montavo, Inc.) and North Coast Acquisition Corp. (filed as Exhibit 10.1 to
our Current Report on Form 8K filed with the SEC on May 9, 2008, and
incorporated herein by reference).10.4
Asset Sale and Assignment Agreement (filed as
Exhibit 10.3 to our Current Report on Form 8k filed with the SEC on August
29, 2008, and incorporated herein by reference).10.5
Convertible Promissory Note dated August 28, 2008
(filed as Exhibit 10.4 to our Current Report on Form 8K filed with the SEC
on August 29, 2008, and incorporated herein by reference).10.6
Investment Agreement dated January 8, 2010 (filed
as Exhibit 10.1 to our Current Report on Form 8K filed with the SEC on
January 19, 2010, and incorporated herein by reference).10.7
Registration Rights Agreement dated January 8, 2010
(filed as Exhibit 10.2 to our Current Report on Form 8K filed with the SEC
on January 19, 2010, and incorporated herein by reference).10.8
Employment Agreement Brook Lang (filed as Exhibit
10.8 to our Annual Report on Form 10K filed with the SEC on April 15,
2010, and incorporated herein by reference).





31.1
Certification of Principal Executive Officer and
Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act*32.1
Certification of Principal Executive Officer and
Principal Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley* * Exhibit filed herewith.





SIGNATURES  In accordance with 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.  Dated:  April 15, 2011 MONTAVO, INC.  By:  /s/ Brook W.
Lang Chief
Executive Officer, Chief Financial Officer, and
Principal Accounting Officer   Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.   April 15, 2011 By:  /s/ Brook W.
Lang Name: Brook Lang Title: Chief Executive Officer and
Director    Supplemental Information to be Furnished With Reports
Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not
Registered Securities Pursuant to Section 12 of the Act.  As of the date of filing of this Annual Report on Form
10-K, we have not provided any annual report with respect to our last fiscal
year or any proxy materials to our shareholders.  We intend to provide
proxy materials to our shareholders with respect to our next annual meeting, and
if we do so, we shall concurrently furnish such materials to the Securities and
Exchange Commission.