Wizzard Software Mid-Year Shareholder Update - Board Approves Stock Dividend.

PITTSBURGH -- Wizzard Software (OTCBB:WIZD) today issued a letter from its CEO, Chris Spencer. The full text is as follows:

Dear Wizzard Shareholder:

The first half of 2006 has been an exciting year of growth, team-building, identifying opportunities and capitalizing on ideas. I would like to thank our employees for all the hard work and long hours they've been putting in, resulting in solid progress toward our Company's goals. We are pleased to announce that for the sixth consecutive quarter our revenues have increased over the same period in the previous year. Our investments in key hires, marketing programs, product innovation and business development are starting to show results.

We continue to penetrate various sales channels for our speech enabled, Talking Pill Bottle products. We recently entered into a distribution agreement with MAVC in Canada and launched a pilot program with one of the top three retail pharmacy chains in the U.S. We expect to expand the pilot beyond the current locations in the very near future, targeting aging population sectors of the country. Initial reports from the new venture with this high profile pharmacy have been extremely positive. We expect to add another top national pharmacy chain to our distribution of the Talking Pill Bottle in the third quarter of 2006. We are also seeing increased interest in the Talking Pill Bottle from various state legislative bodies and feel we are well positioned to capitalize on a growing legislative movement as state officials look to make the taking of prescription medication safer for their elderly constituents. We are continually challenging our sales and marketing strategies and our delivery of product to achieve better customer satisfaction, market share and operating results. The ability for the elderly and visually impaired to fully comprehend their prescription medication instructions is as necessary as ever as new drugs are constantly introduced to the market and medication combinations make following dosage instructions critical.

We continue to advance our speech recognition and text-to-speech licensing business through our relationships with IBM and AT&T. Recently, we announced the expansion of our territory to include the Asia-Pacific region for one of our product lines and we are beginning to see interest in our offerings coming from this sector. The number of quarterly reporting customers is growing consistently and we have several customers who have the potential to require large volume licenses in the coming quarters. We continue to meet our customers needs from industry segments such as emergency telephone alerts, ATM's, video games, e-books, podcasting, telephony IVR and the healthcare market. In the third quarter we will be launching a new platform by which multiple modes of input and output are supported for speech-based applications including handhelds, tablets, servers and PCs. We expect a strong interest from the healthcare market specifically, and several areas of the government as well.

Also in the third quarter, we plan to announce a significant update to our server based text-to-speech offering which will put us in a position for the first time to meet the needs of the large call center and other IVR specific markets. This is a result of almost a year of internal discussions and planning and is one of the most strategic updates to our product offerings we've ever made. Another announcement we expect to make is that of an extremely accurate, speaker-independent, server based speech recognition engine. With the rapid adoption of audio and video based content on the internet (Web 2.0) we see this new speech recognition engine as a critical component towards monetization for the audio/video businesses that are taking hold across the internet and around the world.

Our home healthcare business continues to be a strong, strategic part of our businesses plan as our country's population ages and new methods of patient data capture become critical components for delivering high quality, affordable healthcare services in a patient's home. Although this has been a gradual process, we believe that we are building a strong business that will offer a complimentary package of new technology and traditional services. Our profits for the first half of 2006 in our home healthcare business are ahead of 2005 profits for the same period and ahead of our own internal projections for 2006. Our people are our strongest asset and we will continue to invest in the development of our nurses, aids and staff while providing them with new, speech-based applications to assist them in offering the best possible service for our referrers, and the highest quality of care to our patients. We are currently expanding our territory within the state of Wyoming as a result of the state's willingness to increase Medicaid payments by up to 30% and we expect insurance providers within the state to follow suit this year. Traditionally, the medical industry is the largest user of speech recognition and we continue to see huge potential in applying our speech technologies to the home healthcare market so that our people can deliver the most cost effective, personal care possible. Over time, we believe our business strategy will pay off, providing robust, balanced and steady growth.

Finally, we would like to take this opportunity to thank all of our shareholders for your continued support. The sound foundation we have built with your support over the last eleven years will be the basis for our future growth. To reward our current shareholder loyalty and encourage continued support for Wizzard, the Board of Directors has voted to issue a special common stock dividend. For every ten (10) shares you own on the record date, you will receive one (1) additional share of Wizzard's common stock. The record date for this dividend will be October 15, 2006, and the distribution date will be October 30, 2006. Additional information on how you will receive your shares will be forthcoming.

The board recognizes the wide variety of investment opportunities our shareholders have available to them and appreciates your willingness to support Wizzard through your continued ownership of the Company. We truly believe that with our current and new products on the way, we have a front-row seat for the next unfolding of Internet history.

Thank you for your continued support of Wizzard,

Christopher J. Spencer

Chairman and CEO of Wizzard Software Corp.

About Wizzard Software

Founded in 1996, Wizzard Software has become a leader in the speech technology application development market. Wizzard architects solutions to business problems using its expertise in consulting, speech development tools and building speech based applications for the Desktop and Internet. Wizzard has achieved global recognition because of its expertise with voice communication whether it is via computer or telephone. Wizzard's successes have lead to expanding speech technology opportunities in both the government and commercial sectors including several healthcare industry products and services. For more information, visit www.wizzardsoftware.com. In April of 2004, Wizzard acquired MedivoxRx Technologies. Established in 2000, MedivoxRx is the originator of "Rex", the talking prescription pill bottle, which "talks" to the patient allowing them to distinguish what type of medication is in the bottle and hear critical information on dosage amounts and refill parameters. Additional information on MedivoxRx can be found at www.rxtalks.com. In September of 2005, Wizzard acquired Interim Health Care of Wyoming. Based in Casper, Wyoming, Interim is part of the fast growing home health segment of the healthcare industry, providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 home health agencies that comprise Interim Health Care.

Legal Notice

Legal Notice Regarding Forward-Looking Statements: "Forward-looking Statements" as defined in the Private Securities litigation Reform Act of 1995 may be included in this news release. These statements relate to future events or our future financial performance. These statements are only predictions and may differ materially from actual future results or events. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments or otherwise. There are important risk factors that could cause actual results to differ from those contained in forward-looking statements, including, but not limited to risks associated with changes in general economic and business conditions, actions of our competitors, the extent to which we are able to develop new services and markets for our services, the time and expense involved in such development activities, the level of demand and market acceptance of our services, changes in our business strategies and acts of terror against the United States.