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        &lt;b&gt;&lt;font style="FONT-SIZE:10pt" lang="EN-US"&gt;NOTE 2 &amp;#8211;

        GOING CONCERN AND MANAGEMENT&amp;#8217;S LIQUIDITY

        PLANS&lt;/font&gt;&lt;/b&gt;

      &lt;/p&gt;&lt;br/&gt;&lt;p style="background: white; text-align: justify; margin: 0in 0in 0pt 13.5pt;"&gt;

      &lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;The&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;Company has not yet generated any significant

      revenues, and has incurred net losses since inception. As of

      June 30, 2013, the Company had cash&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;and cash equivalents&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;of $&lt;/font&gt;&lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;1,424,623&amp;#160;&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;and a working capital&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;deficit&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;of $&lt;/font&gt;&lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;1,134,895&lt;/font&gt;&lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;.&amp;#160;&lt;/font&gt;&lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;&amp;#160; During the six months ended June 30,

      2013, the Company used net cash in operating activities of

      approximately $1,240,000.&amp;#160;&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;The Company believes that its current cash on

      hand will be sufficient to fund its project&lt;/font&gt;&lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;ed&amp;#160;&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;operating requirements through&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="EN-US"&gt;December&amp;#160;&lt;/font&gt; &lt;font style="font-size: 10pt; font-weight: normal;" lang="X-NONE"&gt;2013. These conditions raise substantial doubt

      about the Company&amp;#8217;s ability to continue as a going

      concern.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="BACKGROUND:white; TEXT-ALIGN:justify; MARGIN:0in 0in 0pt 13.5pt"&gt;

        &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;The Company's primary source of operating

        funds since inception has been cash proceeds from the

        issuance of common shares&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="EN-US"&gt;and

        preferred shares to its initial investors,&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;proceeds from the issuance of

        convertible&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="EN-US"&gt;secured&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;debentures, the sale of&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="EN-US"&gt;common&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;stock and&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="EN-US"&gt;debentures&amp;#160;&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;in

        private placements&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="EN-US"&gt;and

        the issuance of common stock as payment of fees for

        services from third parties.&lt;/font&gt; &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;The Company intends to raise additional

        capital through private debt and equity investors, but

        there can be no assurance that these funds will be

        available on terms acceptable to the Company, or will be

        sufficient to enable the Company to fully complete its

        development activities or sustain operations. If the

        Company is unable to raise sufficient additional funds, it

        will have to develop and implement a plan to further extend

        payables, reduce overhead, or scale back its current

        business plan until sufficient additional capital is raised

        to support further operations. There can be no assurance

        that such a plan will be successful.&lt;/font&gt;

      &lt;/p&gt;&lt;br/&gt;&lt;p style="BACKGROUND:white; TEXT-ALIGN:justify; MARGIN:0in 0in 0pt 13.5pt"&gt;

        &lt;font style="FONT-SIZE:10pt; FONT-WEIGHT:normal" lang="X-NONE"&gt;Accordingly, the accompanying condensed

        consolidated financial statements have been prepared in

        conformity with accounting principles generally accepted in

        the United States of America, which contemplate

        continuation of the Company as a going concern and the

        realization of assets and satisfaction of liabilities in

        the normal course of business. The carrying amounts of

        assets and liabilities presented in the financial

        statements do not necessarily purport to represent

        realizable or settlement values. The condensed consolidated

        financial statements do not include any adjustment that

        might result from the outcome of this uncertainty.&lt;/font&gt;

      &lt;/p&gt;&lt;br/&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>If there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date), disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recover ability or classification of recorded asset amounts or the amounts or classification of liabilities.</ElementDefenition><ElementReferences>No definition available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Liquidity Going Concern Disclosure [Text Block]</Label></Row></Rows><Footnotes /><IsEquityReport>false</IsEquityReport><ReportName>GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>true</HasCustomUnits><IsEmbedReport>false</IsEmbedReport><IsMultiCurrency>false</IsMultiCurrency><ReportType>Sheet</ReportType><RoleURI>http://www.bluecalypso.com/role/GOINGCONCERNANDMANAGEMENTSLIQUIDITYPLANS</RoleURI><NumberOfCols>1</NumberOfCols><NumberOfRows>2</NumberOfRows></InstanceReport>
