The voice messaging industry, and specifically emergency notification, is a high growth industry. According to Gartner, Inc., a leading research firm in technology, by year end 2007, 75% of the Global 2000 companies will have emergency notification systems in place for employee communications in the event of a crisis.

Interactive voice messaging technology has been available for more than a decade, but only became widely accepted in the late-1990’s with the advent of affordable integrated telephone and computer systems. As computer-telephony technology improved and became more affordable, companies increasingly adopted interactive voice messaging as a means of reaching millions of customers. Examples of customary uses include businesses reaching their customer base and others for advertising purposes, local, state and federal governments providing emergency notifications, and political parties campaigning for “get out to vote” messages.

In 2003, the United States government established a national “do not call” registry for residential and wireless telephone consumers. This legislation allows consumers to register their telephone numbers on a registry, so they will not receive unsolicited calls from telemarketers and telemarketing companies. Although the implementation of the “do not call” registry caused a decrease in the number of consumer “cold calls” for lead generation, businesses have increasingly turned to interactive voice messaging to communicate with existing customers to increase customer service, a permitted activity under the legislation. There also has been increased use of interactive voice messaging for political campaigning, including voter registration, “get out to vote” and polls/surveys, all of which also are permitted under the legislation.

The voice-messaging industry, and especially the emergency notification segment, is highly competitive and fragmented. Historically, most providers of voice-messaging services have been small companies serving a limited number of markets. The majority of emergency notification providers are less than 10 years old and have small established customer bases.

The Company also developed Community Touch, an internet based voice messaging service intended for use by governmental agencies, municipalities, states, and counties to provide non-emergency and event notification as a communication system to reach citizens.

Also, in September 2005, the Company acquired contracts from Simtel to provide emergency notification services to municipalities and government organizations utilizing Simtel’s existing technology. In January of 2006, the Company acquired 151 contracts from CAN.

The Company has developed additional applications for its emergency notification platform for use by municipalities and other governmental agencies to enable them to not only rapidly deploy first responder via telephone, but they can also use SMS, pager, fax and e-mail notification.

The Company has also integrated an extensive on-line geographic information system, or GIS, containing mapping capabilities which allow governmental agencies to transmit emergency notifications to persons within a specified geographic area designated by the agency transmitting the message.

The most recent product introduction is called the Messenger. The Messenger was developed to provide an easy to use, on-line messaging system for small volume users that can be launched from any desktop computer. The list can contain just a few phone numbers such as a sports team, dentist or doctors office for the purpose of reminding patients of their appointments or a very large list of a company’s customer database that can be used for a variety of reasons such as product recalls, product notifications, collections or announcements.

Cost of sales increased $1.8 million, or 60.3%, to $4.9 million for the six months ended March 31, 2006, from $3.1 million for the six months ended March 31, 2005.

Gross profit increased $987,000, or 26.1%, to $4.8 million for the six months ended March 31, 2006, from $3.8 million for the six months ended March 31, 2005.

Depreciation and amortization expense increased $334,000, or 77.3%, to $766,000 for the six months ended March 31, 2006, from $432,000 for the six months ended March 31, 2005.

Interest expense for the six months ended March 31, 2006 was $1.1 million which was offset by interest income of $39,000 compared to interest expense of $1.3 million and interest income of $2,000 for the same period in 2005.