**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







**FORM
      10-Q**





**x** **QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**




For
      the
      period ended **June
      30, 2007**





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





**Commission
      file Number: 000-50995**







**uBid.com
      Holdings, Inc.**


*(Exact
      name of registrant as specified in its charter)*





**Delaware**
            **52-2372260***(State
                or Other Jurisdiction of*
            *(IRS
                Employer**Incorporation
                or Organization)*
            *Identification
                No.)*





**8725
      W. Higgins Road, Suite 900, Chicago, Illinois 60631**


*(Address
      of principal executive offices and zip code)*





**Registrant’s
      telephone number including area code:**


**(773)
      272-5000**





Indicate
      by check mark whether the registrant (1) has filed all reports 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 filing requirements for the past
      90
      days. Yes x No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):


Large
      accelerated filer o**** Accelerated
      filer o Non-accelerated
      filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Exchange
      Act Rule 12b-2). Yes o No x





The
      number of shares outstanding of the registrant’s Common Stock, par value $0.001,
      as of August 14, 2007 was 18,197,783







**TABLE
      OF CONTENTS**





**Page**PART
                I
            Financial
              InformationItem 1.
            Consolidated
                Condensed Financial Statements (Unaudited)Consolidated
                Condensed Balance Sheets (Unaudited) June 30, 2007 and December 31,
                2006
            
            3Consolidated
                Condensed Statements of Operations (Unaudited) Three months and Six
                months
                ended June 30, 2007 and 2006
            
            4Consolidated
                Condensed Statement of Shareholders' Equity (Unaudited) Six months
                ended
                June 30, 2007
            
            5Consolidated
                Condensed Statements of Cash Flows (Unaudited) Six months ended June
                30,
                2007 and 2006
            
            6Notes
                to Consolidated Condensed Financial Statements
            
            7-13Item 2.
            Management’s
                Discussion and Analysis of Financial Condition and Resultsof
                Operations
            
            14-23Item 3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            23Item 4.
            Controls
                and Procedures
            
            23-24PART
                II
            Other
              InformationItem 1.
            Legal
                Proceedings
            
            24Item 1A.
            Risk
                Factors
            
            24Item 2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            24Item 3.
            Default
                Upon Senior Securities
            
            24Item 4.
            Submission
                of Matters to a Vote of Security Holders
            
            24Item 5.
            Other
                Information
            
            24Signatures
            
            26




2


**uBid.com
                  Holdings, Inc and Subsidiaries****Consolidated
                  Condensed Balance Sheets****(Dollars
                  in Thousands, except par value data)****(Unaudited)**
  **June
                  30, 2007**
              
              **December
                  31, 2006****Assets****Current
                  Assets**Cash
                  and cash equivalents
              
              $
              10,355
              
              $
              14,785Restricted
                  investments
              
              
              216
              
              
              214Accounts
                  receivable, less allowance for doubtful accounts of $215 and $215,
                  respectively
              
              
              2,114
              
              
              1,810Merchandise
                  inventories, net
              
              
              4,303
              
              
              4,054Prepaid
                  expenses and other current assets
              
              
              1,037
              
              
              1,189**Total
                  Current Assets**
              
              
              18,025
              
              
              22,052**Property
                  and Equipment, net**
              
              
              840
              
              
              924**Purchased
                  Intangible Assets, net**
              
              
              377
              
              
              602**Total
                  Assets**
              
              $
              19,242
              
              $
              23,578**Liabilities
                  and Shareholders' Equity****Current
                  Liabilities**Flooring
                  facility
              
              $
              978
              
              $
              152Accounts
                  payable
              
              
              2,386
              
              
              2,239Accrued
                  expenses:Advertising
              
              
              242
              
              
              428Other
              
              
              731
              
              
              1,024**Total
                  Current Liabilities**
              
              
              4,337
              
              
              3,843******Shareholders'
                  Equity**Common
                  stock, $.001 par value (200,000,000 shares authorized;18,197,783
                  and 20,333,333 issued and outstanding, respectively)
              
              
              20
              
              
              20Treasury
                  stock, 2,135,550 shares of common stock and 580,937 warrants at
                  cost
              
              
              (2,242
              )
              
              -Stock
                  warrants
              
              
              8,086
              
              
              8,086Additional
                  paid-in-capital
              
              
              37,213
              
              
              36,848Accumulated
                  deficit
              
              
              (28,172
              )
              
              (25,219
              )**Total
                  Shareholders' Equity**
              
              
              14,905
              
              
              19,735**Total
                  Liabilities and Shareholders' Equity**
              
              $
              19,242
              
              $
              23,578
  The
                  accompanying notes are an integral part of these consolidated condensed
                  financial statements.




3


**uBid.com
        Holdings, Inc. and Subsidiaries**
 **Consolidated
        Condensed Statements of Operations**
 **(Dollars
        in Thousands, except for share and per share data)**
 **(Unaudited)**
  **Three
                  Months Ended June 30,**
              
              **Six
                  Months Ended June 30,**2007
              
              2006
              
              2007
              
              2006Net
                  Revenues
              
              $
              13,663
              
              $
              19,097
              
              $
              23,270
              
              $
              39,185Cost
                  of Revenues
              
              
              10,794
              
              
              16,980
              
              
              17,849
              
              
              34,159Gross
                  Profit
              
              
              2,869
              
              
              2,117
              
              
              5,421
              
              
              5,026Operating
                  ExpensesGeneral
                  and administrative
              
              
              3,326
              
              
              3,451
              
              
              6,348
              
              
              6,984Sales
                  and marketing
              
              
              1,131
              
              
              1,436
              
              
              2,200
              
              
              2,961Total
                  operating expenses
              
              
              4,457
              
              
              4,887
              
              
              8,548
              
              
              9,945Loss
                  From Operations
              
              
              (1,588
              )
              
              (2,770
              )
              
              (3,127
              )
              
              (4,919
              )Interest
                  Expense
              
              
              (98
              )
              
              (110
              )
              
              (210
              )
              
              (158
              )Interest
                  Income
              
              
              149
              
              
              159
              
              
              324
              
              
              353Other
                  Income, net
              
              
              -
              
              
              -
              
              
              60
              
              
              -Net
                  Loss
              
              $
              (1,537
              )
              $
              (2,721
              )
              $
              (2,953
              )
              $
              (4,724
              )Net
                  Loss per share - Basic and Diluted
              
              $
              (0.08
              )
              $
              (0.13
              )
              $
              (0.15
              )
              $
              (0.23
              )Weighted
                  Average Shares - Basic and Diluted
              
              
              18,761,005
              
              
              20,333,333
              
              
              19,542,826
              
              
              20,156,911
  The
                  accompanying notes are an integral part of these consolidated condensed
                  financial statements.




4




**uBid.com
      Holdings, Inc.**


**Consolidated
      Condensed Statement of Shareholders' Equity**


**(Dollars
      in Thousands)**


**(Unaudited)**





**Common
                Stock**
            
            **Stock**
            
            **Paid-in**
            
            **Treasury
                  Stock**
            
            **Accumulated****Shares**
            
            **Dollars**
            
            **Warrants**
            
            **Capital**
            
            **Shares**
            
            **Dollars**
            
            **Deficit**
            
            **Total**Balance,
                December 31, 2006
            
            
            20,333,333
            
            $
            20
            
            $
            8,086
            
            $
            36,848
            
            
            —
            
            $
            —
            
            $
            (25,219
            )
            $
            19,735Stock
                compensation expense
            
            
            —
            
            
            —
            
            
            —
            
            
            365
            
            
            —
            
            
            —
            
            
            —
            
            
            365Common
                stock and warrants repurchase
            
            
            (2,135,550
            )
            
            —
            
            
            —
            
            
            —
            
            
            2,135,550
            
            
            (2,242
            )
            
            —
            
            
            (2,242
            )Net
                Loss
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (2,953
            )
            
            (2,953
            )Balance,
                June 30, 2007
            
            
            18,197,783
            
            $
            20
            
            $
            8,086
            
            $
            37,213
            
            
            2,135,550
            
            $
            (2,242
            )
            $
            (28,172
            )
            $
            14,905




The
      accompanying notes are an integral part of these consolidated condensed
      financial statements.








5


**uBid.com
        Holdings, Inc and Subsidiaries**
 **Consolidated
        Condensed Statements of Cash Flows**
 **(Dollars
        in Thousands)**
 **(Unaudited)**
  **Six
                  Months Ended June 30,****2007**
              
              **2006****Cash
                  Flows From Operating Activities**Net
                  loss
              
              $
              (2,953
              )
              $
              (4,724
              )Adjustments
                  to reconcile net loss to net cash used inOperating
                  activitiesDepreciation
                  and amortization
              
              
              409
              
              
              143Non-cash
                  stock compensation expense
              
              
              365
              
              
              461Changes
                  in assets and liabilities:Accounts receivable
              
              
              (304
              )
              
              (1,704
              )Merchandise inventories
              
              
              (249
              )
              
              (3,471
              )Prepaid expenses and other current assets
              
              
              152
              
              
              (280
              )Accounts payable
              
              
              146
              
              
              (1,849
              )Accrued expenses
              
              
              (479
              )
              
              (2,046
              )**Net
                  cash used in operating activities**
              
              
              (2,913
              )
              
              (13,470
              )**Cash
                  Flows From Investing Activities**Capital
                  expenditures
              
              
              (100
              )
              
              (97
              )Change
                  in restricted investments
              
              
              (2
              )
              
              6,791**Net
                  cash (used in) provided by investing activities**
              
              
              (102
              )
              
              6,694**Cash
                  Flows From financing Activities**Change
                  in flooring facility
              
              
              827
              
              
              (1,131
              )Proceeds
                  from sale of common stock and warrants
              
              
              -
              
              
              12,000Redemption
                  of common stock
              
              
              -
              
              
              (12,000
              )Proceeds
                  from note payable to bank
              
              
              -
              
              
              500Common
                  stock and warrant repurchase
              
              
              (2,242
              )
              
              -Other
                  financing activities
              
              
              -
              
              
              (205
              )**Net
                  cash used in financing activities**
              
              
              (1,415
              )
              
              (836
              )**Net
                  Decrease in Cash and Cash Equivalents**
              
              
              (4,430
              )
              
              (7,612
              )**Cash
                  and Cash Equivalents, beginning of period**
              
              
              14,785
              
              
              21,176**Cash
                  and Cash Equivalents, end of period**
              
              $
              10,355
              
              $
              13,564**Supplemented
                  Cash Flow Disclosure**Cash
                  paid for interest
              
              $
              95
              
              $
              136Warrants
                  issued in second offering
              
              $
              -
              
              $
              1,560Warrants
                  and stock issued as stock issuance costs
              
              $
              -
              
              $
              204




The
        accompanying notes are an integral part of these consolidated condensed
        financial statements.


6




**UBID.COM
      HOLDINGS, INC.** **and Subsidiaries**


**NOTES
      TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**


**June
      30, 2007**


**Dollars
      in Thousands except share and per share data**


**(Unaudited)**




**1.**  **Basis
      of Presentation**





uBid.com
      Holdings, Inc. and subsidiaries (the “Company”) operate a leading on-line
      business to consumer and business to business marketplace that enables itself,
      certified merchants, manufacturers, retailers, distributors and small businesses
      to offer high quality excess, new, overstock, close-out, refurbished and limited
      supply brand name merchandise to consumer and business customers primarily
      located in the United States. Through the Company’s website, located at www.ubid.com ,
      the
      Company offers merchandise across a wide range of product categories including
      but not limited to computer products, consumer electronics, apparel, housewares,
      watches, jewelry, travel, sporting goods, home improvement products and
      collectibles. The Company’s marketplace employs a combination of auction style
      and fixed price formats.





The
      Company’s unaudited consolidated condensed financial statements reflect normal
      recurring adjustments that are necessary to present fairly the Company’s
      financial position and results of operations on a basis consistent with that
      of
      the prior audited consolidated financial statements. As permitted by rules
      and
      regulations of the Securities and Exchange Commission applicable to quarterly
      reports on Form 10-Q, the Company has condensed or omitted certain information
      and disclosures normally included in financial statements prepared in accordance
      with accounting principles generally accepted in the United States of America
      (“GAAP”). Results for interim periods are not necessarily indicative of the
      results that may be expected for a full year. These interim financial statements
      should be read along with the audited consolidated financial statements included
      in our Form 10-K for the year ended December 31, 2006. The consolidated
      condensed financial statements include the accounts of the Company and its
      wholly owned subsidiaries. All material intercompany accounts and transactions
      have been eliminated in the consolidated financial statements.





The
      preparation of financial statements in accordance with GAAP requires management
      to make estimates and assumptions that affect the amounts reported in the
      Company’s Consolidated Condensed Financial Statements and accompanying notes.
      Actual results could differ materially from those estimates.





**2.**  **Summary
      of Significant Accounting Policies**




Since
      December 31, 2006, none of the critical accounting policies, or the Company’s
      application thereof, as more fully described in the Company’s 2006 Annual
      Report, has significantly changed. Certain critical accounting policies have
      been presented below due to the significance of related transactions during
      the
      six months ended June 30, 2007.





***Revenue
      Recognition***





The
      Company sells merchandise under two types of arrangements: direct purchase
      sales
      and revenue sharing arrangements.





For
      direct purchase sales to consumer and business customers, the Company is
      responsible for conducting the auction or listing the fixed sale price for
      merchandise owned by the Company, billing the customer, shipping the merchandise
      to the customer, processing merchandise returns and collecting accounts
      receivable. In accordance with the provisions of Staff Accounting Bulletin
      104,
      the Company recognizes revenue when the following revenue recognition criteria
      are met: (1) persuasive evidence of an arrangement exists; (2) the product
      has
      been shipped (FOB Shipping Point) and the customer takes ownership and assumes
      the risk of loss; (3) the selling price is fixed or determinable; and (4)
      collection of the resulting receivable is reasonably assured.




7





For
      sales
      of merchandise under revenue-sharing agreements, the Company is responsible
      for
      conducting the auction for merchandise owned by third parties, billing the
      customer, arranging for a third party to complete delivery to the customer,
      processing merchandise returns and collecting accounts receivable. The Company
      bears no physical inventory loss or return risk related to these sales. The
      Company records commission revenue at the time of shipment.





***Long-Lived
      Assets***




Long-lived
      assets are reviewed for impairment whenever events or circumstances indicate
      the
      remaining useful life of any long-lived assets may warrant revision or that
      the
      remaining carrying value of such assets may not be recoverable. When factors
      indicate that such assets should be evaluated for possible impairment, the
      Company uses an estimate of the undiscounted cash flows over the remaining
      life
      of the asset in measuring whether the asset is recoverable. No impairment has
      been recognized for the periods ended June 30, 2007 or 2006.





***Stock
      Based Compensation***





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      No. 123(R) (“SFAS 123R”). This pronouncement requires companies to measure the
      cost of employee service received in exchange for a share based award (typically
      stock options) based on the fair value of the award. The Company has elected
      to
      use the “modified prospective” transition method for stock options granted prior
      to January 1, 2006, but for which the vesting period is not complete. Under
      this
      transition method, the Company accounts for such awards on a prospective basis,
      with expense being recognized in its statement of operations beginning in the
      first quarter of 2006 and continuing over the remaining requisite service period
      based on the grant date fair value estimated in accordance with Statement of
      Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation
      (“SFAS 123”). The Company recognizes these compensation costs on a straight-line
      basis over the requisite service period of the award which is generally the
      option vesting term of four years. The total compensation expense related to
      the
      stock option plan for the three months ended June 30, 2007 and 2006 was
      approximately $127 and $230, respectively. The total compensation expense
      related to the stock option plan for the six months ended June 30, 2007 and
      2006
      was approximately $365 and $461, respectively.





***Recent
      Pronouncements***





Updates
      to recent accounting standards as disclosed in the Company’s Annual Report on
      Form 10-K for the year ended December 31, 2006 are as follows:





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair
      value to measure assets and liabilities. It also responds to investors’ requests
      for expanded information about the extent to which companies measure assets
      and
      liabilities at fair value, the information used to measure fair value, and
      the
      effect of fair value measurements on earnings. SFAS 157 applies whenever
      other standards require (or permit) assets or liabilities to be measured at
      fair
      value, and does not expand the use of fair value in any new circumstances.
      SFAS 157 is effective for financial statements issued for fiscal years
      beginning after November 15, 2007 and is required to be adopted by the
      Company in the first quarter of 2008. The Company is currently evaluating the
      effect that the adoption of SFAS 157 will have on its consolidated results
      of operations and financial condition but does not expect it to have a material
      impact.





On
      February 15, 2007, the FASB issued Statement of Financial Accounting Standards
      No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities
      -
      Including an Amendment of FASB Statement No. 115" ("SFAS 159"). This standard
      permits an entity to measure financial instruments and certain other items
      at
      estimated fair value. Most of the provisions of SFAS No. 159 are elective;
      however, the amendment to FASB No. 115, "Accounting for Certain Investments
      in
      Debt and Equity Securities," applies to all entities that own trading and
      available-for-sale securities. The fair value option created by SFAS 159 permits
      an entity to measure eligible items at fair value as of specified election
      dates. The fair value option (a) may generally be applied instrument by
      instrument, (b) is irrevocable unless a new election date occurs, and (c) must
      be applied to the entire instrument and not to only a portion of the instrument.
      SFAS 159 is effective as of the beginning of the first fiscal year that begins
      after November 15, 2007. Early adoption is permitted as of the beginning of
      the
      previous fiscal year provided that the entity (i) makes that choice in the
      first
      120 days of that year, (ii) has not yet issued financial statements for any
      interim period of such year, and (iii) elects to apply the provisions of FASB
      157. We are currently evaluating the impact of SFAS 159, if any, on our
      consolidated financial statements.




8




**3.
      Net Loss Per Share (“EPS”)**





The
      Company computes loss per share under Statement of Financial Accounting
      Standards (“SFAS”) No. 128, “Earnings Per Share.” The statement requires
      presentation of two amounts: basic and diluted loss per share. Basic loss per
      share is computed by dividing the loss available to common shareholders by
      the
      weighted average common shares outstanding. Dilutive earnings per share would
      include all common stock equivalents unless anti-dilutive.





Due
      to
      losses in each period presented, the Company has not included the following
      common stock equivalents in its computation of diluted loss per share as their
      input would have been anti-dilutive.


**June
                  30,**
              
              **2007**
              
              **2006**Shares
                  subject to stock warrants
              
              
              3,232,939
              
              
              3,813,336Shares
                  subject to stock options
              
              
              1,762,200
              
              
              1,768,1004,995,139
              
              
              5,581,436





**4.
      Merger and Private Offerings**





On
      December 29, 2005 (the “Closing Date”), Cape Coastal Trading Corporation (or
“Cape Coastal”), uBid Acquisition Co., Inc. (“Acquisition Sub”) and uBid, Inc.
      entered into a Merger Agreement and Plan of Reorganization (the “Merger
      Agreement”). Under the Merger Agreement, Acquisition Sub merged with and into
      uBid, Inc., with uBid, Inc. remaining as the surviving corporation and a 100%
      owned subsidiary of Cape Coastal Trading Corporation. Just prior to the
      Closing Date, all outstanding convertible preferred shares and warrants to
      acquire shares of uBid, Inc. before the merger were converted and exercised
      such
      that, just prior to the merger, 3,793 shares of common stock were outstanding
      which were exchanged on a 2,320 to 1 basis on the closing date
      into 8,800,000 shares of common stock of Cape Coastal, with up to 444,444
      shares of such common stock subject to redemption at a redemption price of
      $4.50. The stockholders of Cape Coastal before the merger retained 599,331
      shares of common stock of Cape Coastal after the merger. Before the merger,
      Cape
      Coastal was a public shell company.  Concurrent with the merger, the
      Company amended its Certificate of Incorporation to change its name
      from Cape Coastal Trading Corporation to “uBid.com Holdings, Inc.”





The
      merger was treated as a recapitalization of uBid, Inc. for financial accounting
      purposes. Accordingly, the historical financial statements of Cape Coastal
      before the merger were replaced with the historical financial statements of
      uBid, Inc. before the merger. All share and per share data has been
      retroactively restated to reflect the implicit conversion ratio related to
      the
      exchange of shares in the merger.





Concurrent
      with the merger, the Company completed the first part of a private offering
      to accredited investors. The Company sold 10,000,003 shares of 
its common stock (of which 2,222,224 shares were subject to redemption) and
      warrants to purchase 2,500,003 shares of its common stock at $5.85 for a period
      of 5 years (the shares and warrants are collectively referred to as “Units”),
      for aggregate consideration of approximately $45.0 million. These warrants
      were valued at $2.08 per warrant for an aggregate of $5.2
      million using a Black-Scholes option-pricing model using a 5 year
      expected life, a risk free interest rate of 5.0%, no expected dividends and
      a
      68.0% volatility. Some of the investors participating in the first part of
      the
      private offering held notes that were issued by uBid before the merger,
      including $10.5 million of debt held by the Petters Group, a holder greater
      than
      5% of our voting common stock, (“Petters Group”) and $5.0 million of debt held
      by the bridge loan holders. Rather than accepting cash consideration for the
      Units acquired by these investors, the Company agreed to issue Units at a
      rate of one Unit for each $4.50 of debt for consideration of the note holders’
cancellation of the existing notes. Therefore, the consideration the
      Company received on the Closing Date consisted of approximately $29.5 million
      in
      cash and $15.5 million in cancelled debt. In addition, on the Closing
      Date, the Company issued warrants to purchase 333,333 shares of our common
      stock to the bridge note holders as a financing fee, which warrants are
      exercisable for three years at an exercise price of $4.50 and the value of
      which, $0.6 million, was recorded as interest expense. The Company also issued
      warrants to purchase 230,000 shares of its common stock to its
      placement agents in the offering, which warrants are exercisable for five years
      at an exercise price of $4.50 and the value of which, $0.5 million, was recorded
      as a cost of the equity issuance. These warrants were valued at $1.80 and $2.27
      respectively per warrant for an aggregate of $1.1 million using a
      Black-Scholes option-pricing model using the warrants respective life, a risk
      free interest rate of 5.0%, no expected dividends and a 68.0% volatility.
      Issuance costs, including the value of the warrants, were $4.7
      million.




9





On
      February 3, 2006, the Company completed the second part of the
      private offering of Units to accredited investors. In this offering, the
      Company sold 3,000,000 shares of its common stock and warrants to
      purchase 750,002 shares of its common stock on the same terms as
      described above for an aggregate of $13.5 million. The Company also
      redeemed the 2,666,668 shares of common stock issued in connection with the
      merger and the first private offering that were subject to
      redemption at a price of $4.50 per share and issued 600,667 shares of common
      stock (valued at $4.50 per share) to Cape Coastal and uBid’s financial advisor,
      Calico Capital Group. In addition, the Company issued additional
      warrants to purchase 90,000 shares of its common stock to its
      placement agents on the same terms as described above. The second part of the
      private offering resulted in no net cash proceeds being retained by the Company.
      Issuance costs, including the value of the warrants and the shares issued to
      Calico Capital Group, were $4.4 million.





On
      April
      25, 2007, The Company entered into a stock repurchase agreement with a group
      of
      private investors under common management to repurchase 2,135,550 shares of
      the
      Company’s common stock and warrants to purchase 580,937 shares of the Company’s
      common stock held by such private investors for $1.05 per share or an aggregate
      purchase price of $2,242 These shares and warrants repurchased in this privately
      negotiated transaction were originally acquired by the private investors in
      the
      Company’s private placement that initially closed on December 29, 2005. The
      repurchase represented 11% of the common stock and warrants
      outstanding.





The
      Company’s registration statement on Form S-1 originally filed on February 28,
      2006 was declared effective by the Securities and Exchange Commission on July
      21, 2006. The Registration Statement includes 20,210,109 shares of common stock
      which are held by existing shareholders of the Company. The Company currently
      has 18,197,783 shares of common stock outstanding. The registration statement
      also includes 3,903,338 shares of common stock issuable upon exercise of
      warrants held by investors of the Company. The Company's shares will continue
      to
      trade under the symbol UBHI on the NASD OTC Bulletin Board.





**5.**  **2005
      Equity Incentive Plan**





The
      2005
      Equity Incentive Plan is an equity-based compensation plan to provide incentives
      to, and to attract, motivate and retain the highest qualified employees,
      directors, consultants and other third party service providers. The 2005 Equity
      Incentive Plan enables the board to provide equity-based incentives through
      grants or awards of stock options and restricted stock (collectively, “Incentive
      Awards”) to present and future employees, consultants, directors, and other
      third party service providers.





A
      total
      of 2,500,000 shares of common stock have been reserved for issuance under the
      2005 Equity Incentive Plan. If an Incentive Award granted pursuant to the 2005
      Equity Incentive Plan expires, terminates, is unexercised or is forfeited,
      or if
      any shares are surrendered to the Company in connection with an
      Incentive Award, the shares subject to such award and the surrendered shares
      will become available for future awards under the 2005 Equity Incentive Plan.
      Options generally vest over a period of four years and have a ten year
      contractual life. At June 30, 2007 and 2006, the Company had options to
      purchase 1,762,200 and 1,763,400 shares, respectively, of common stock
      outstanding to certain officers and other employees. The compensation costs
      charged against income was $127 and $230 for the three months ended June 30,
      2007 and 2006, respectively. The compensation costs charged was $365 and $461
      for the six months ended June 30, 2007 and 2006, respectively. Compensation
      costs are included in General and Administrative Expenses in the Consolidated
      Condensed Statement of Operations.





None
      of
      the Incentive Awards granted under the 2005 Equity Incentive Plan were issued
      for cash consideration collected from the participants. The Incentive Awards
      were granted to participants in the 2005 Equity Incentive Plan on the basis
      of
      services to be provided to the Company by the participants.




10





The
      fair
      value of the options awarded for the three months and six months ended June
      30,
      2007 and 2006, were estimated using the Black-Scholes option pricing model
      with
      the following weighted average assumptions:


**Three
                  months ended**
              
              **Six
                  months ended****June
                  30,**
              
              **June
                  30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Risk
                  -free interest rate
              
              
              5.0
              %
              
              5.0
              %
              
              5.0
              %
              
              5.0
              %Dividend
                  yield
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Expected
                  volatility
              
              
              68.0
              %
              
              68.0
              %
              
              68.0
              %
              
              68.0
              %Expected
                  life (years)
              
              
              6.0
              
              
              6.0
              
              
              6.0
              
              
              6.0Weighted
                  average grant date fair value
              
              $
              0.85
              
              $
              3.92
              
              $
              0.92
              
              $
              3.83Expected
                  forfeiture rate
              
              
              5.0
              %
              
              4.9
              %
              
              5.0
              %
              
              4.9
              %




The
      risk-free interest rate is based on the U.S. Treasury Bill rates. The dividend
      reflects the fact that the Company has never paid a dividend on its common
      stock
      and does not expect to in the future. Expected volatility was based on a
      market-based implied volatility. The expected term of the options is based
      on
      what the Company believes will be representative of future behavior. In
      addition, we are required to estimate the expected forfeiture rate and recognize
      expense only for those shares expected to vest. If our actual forfeiture rate
      is
      materially different from our estimate, the stock-based compensation expense
      could be significantly different from what we have recorded in the current
      period.





The
      following is a summary of all of the Company’s stock option
      activity:


**Shares
                  under**
              
              **Weighted-**
                      **average**
                      **exercise
                        price per****option**
              
              **share**Outstanding
                  at December 31, 2006
              
              
              1,530,600
              
              
              4.50Granted
              
              
              250,000
              
              
              1.49Exercised
              
              
              -
              
              
              -Surrendered
              
              
              (101,700
              )
              
              4.91Outstanding
                  at March 31, 2007
              
              
              1,678,900
              
              
              4.08Granted
              
              
              120,000
              
              
              1.68Exercised
              
              
              -
              
              
              -Surrendered
              
              
              (36,700
              )
              
              5.12Outstanding
                  at June 30, 2007
              
              
              1,762,200
              
              $
              3.96Exercisable
                  at June 30, 2007
              
              
              101,400
              
              $
              4.23


As
      of
      June 30, 2007 there was $2,396 of total unrecognized compensation cost related
      to the nonvested option awards under the 2005 Equity Incentive Plan. That cost
      is expected to be recognized over the 3.0 year remaining vesting period of
      the
      nonvested option awards. The total fair value of the option awards that vested
      during the three months and six months ended June 30, 2007 was $224 and $298,
      respectively.




11





The
      following summarizes information about stock options at June 30,
      2007:


**Outstanding**
              
              **Exercisable****Exercise****Price**
              
              **Number****Outstanding
                  at****June
                  30, 2007**
              
              **Weighted**
                **Average****Remaining****Contractual****Life**
              
              **Weighted****Average****Exercise****Price**
              
              **Number****Exercisable
                  at****June
                  30, 2007**
              
              **Weighted****Average****Exercise****Price**.01
                  - 2.00
              
              
              349,800
              
              
              9.7
              
              $
              1.46
              
              
              15,625
              
              $
              1.492.01
                  - 4.00
              
              
              93,100
              
              
              9.4
              
              $
              3.02
              
              
              6,250
              
              $
              2.904.01
                  - 6.00
              
              
              1,251,400
              
              
              8.5
              
              $
              4.50
              
              
              62,850
              
              $
              4.506.01+
              
              
              67,900
              
              
              8.5
              
              $
              6.26
              
              
              16,675
              
              $
              6.251,762,200
              
              
              
              
              $
              3.96
              
              
              101,400
              
              $
              4.23





The
      aggregate intrinsic value of the outstanding options (the difference between
      the
      closing stock price on the last trading day of the period ended June 30, 2007
      of
      $1.80 per share and the exercise price, multiplied by the number of in-the-money
      options) was $537. This amount will change based on changes in the fair market
      value of the Company’s common stock.





**6.**  **Note
      Payable - Bank**





On
      May 9, 2006, the Company and its subsidiaries entered into a Credit and
      Security Agreement with Wells Fargo Bank, National Association acting through
      Wells Fargo Business Credit and related security agreements and other agreements
      described in the Credit and Security Agreement (the “Credit Agreement”). The
      Credit Agreement provides for advances to the Company of up to a maximum of
      $25,000. The amount actually available to the Company will vary from time to
      time, depending on, among other factors, the amount of eligible inventory and
      the amount of eligible accounts receivable. The obligations under the Credit
      Agreement and all related agreements are secured by all of the Company assets.
      The initial term of the Agreement is three years, expiring on April 28,
      2009. Up to $7,000 of the maximum amount is available for irrevocable, standby
      and documentary letters of credit. Advances under the Credit Agreement bear
      interest at a base rate (Wells Fargo Bank's prime rate) or LIBOR plus 2.5%.
      The
      Credit Agreement requires a prepayment fee of $500 if the Company terminates
      the
      Credit Agreement during its first year, $375  if
      it
      terminates the Credit Agreement during its second year and $125 if the Company
      terminates the Credit Agreement during the third year. The Credit Agreement
      requires the Company, among other things, to limit capital expenditures and
      maintain minimum availability on the line. Also, the Company is obligated
      contractually by a restrictive lock box arrangement. The Credit Agreement also
      requires the Company to pay a variety of other fees and expenses, including
      minimum annual interest of $120. The Company as of June 30, 2007 had $49 in
      deferred financing fees being amortized over the life of the Credit Agreement.
      As of June 30, 2007, the effective loan rate was 8.25% and the Company had
      no
      outstanding balance and was in compliance with all the loan
      covenants.





**7.
      Segment Information**





The
      Company is organized into four operating segments: Direct sales channel, uBid
      certified Merchant (“UCM”) sales channel, Business to Business sales channel and
      Other. In classifying its operational entities into a particular segment, the
      Company segregated its operations with similar economic characteristics,
      products and services, customers and methods of distribution into distinct
      operating groups. Prior to March 31, 2007, all operating segments were
      aggregated into one reportable segment. The Company’s management reviews the
      four operating segments revenue and gross profits to evaluate segment
      performance and allocate resources. Operating expenses are not analyzed by
      segment.




12


For
      the
      Direct sales channel, the Company is responsible for conducting the auction
      or
      listing the fixed sale price for merchandise owned by the Company, billing
      the
      customer, shipping the merchandise to the customer, processing merchandise
      returns and collecting accounts receivable.





For
      the
      UCM sales channel, the Company is responsible for conducting the auction for
      merchandise owned by third parties, billing the customer, arranging for a third
      party to complete delivery to the customer, processing merchandise returns
      and
      collecting accounts receivable. The Company bears no physical inventory loss
      or
      return risk related to these sales. The Company records commission revenue
      at
      the time of shipment.





For
      the
      Business to Business sales channel, the Company sells product purchased directly
      to other businesses. Revenues are recognized upon shipment.





All
      other
      revenues consist primarily of advertising revenue. Advertising revenues are
      derived principally from the sale of online advertisements. Advertising revenues
      on contracts are recognized as “impressions” (i.e., the number of times that an
      advertisement appears in pages viewed by users of our websites). Impressions
      are
      delivered over the term of the agreement where such agreements provide for
      minimum monthly, quarterly or annual advertising commitments.


**(Dollars
                  in Thousands)****Three
                  months Ended June 30,**
              
              **Six
                  months Ended June 30,**Net
                  Revenue
              
              **2007**
              
              **2006**
              
              **2007**
              
              **2006**Direct
              
              $
              9,002
              
              $
              14,949
              
              $
              16,770
              
              $
              31,253UCM
              
              
              1,341
              
              
              1,059
              
              
              2,797
              
              
              2,068Business
                  to Business
              
              
              3,035
              
              
              2,992
              
              
              3,096
              
              
              5,679Other
              
              
              285
              
              
              97
              
              
              607
              
              
              185Total
              
              $
              13,663
              
              $
              19,097
              
              $
              23,270
              
              $
              39,185Gross
                  ProfitDirect
              
              $
              873
              
              $
              892
              
              $
              1,633
              
              $
              2,314UCM
              
              
              1,341
              
              
              1,059
              
              
              2,797
              
              
              2,068Business
                  to Business
              
              
              370
              
              
              69
              
              
              384
              
              
              459Other
              
              
              285
              
              
              97
              
              
              607
              
              
              185Total
              
              $
              2,869
              
              $
              2,117
              
              $
              5,421
              
              $
              5,026Gross
                  Profit %Direct
              
              
              9.7
              %
              
              6.0
              %
              
              9.7
              %
              
              7.4
              %UCM
              
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %Business
                  to Business
              
              
              12.2
              %
              
              2.3
              %
              
              12.4
              %
              
              8.1
              %Other
              
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %Total
              
              
              21.0
              %
              
              11.1
              %
              
              23.3
              %
              
              12.8
              %
  13





**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.**





The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with our consolidated condensed
      financial statements and related notes included in Item 1 of Part 1 of this
      Quarterly Report and the audited consolidated financial statements and notes
      thereto and Management’s Discussion and Analysis of Financial Condition and
      Results of Operations contained in the Company’s Annual Report on Form 10-K for
      the fiscal year ended December 31, 2006. uBid.com Holdings, Inc. is a holding
      company for uBid, Inc., and DiBu Trading Corp., Inc. our operating businesses.
      For purposes of this Quarterly Report, unless otherwise indicated or the context
      otherwise requires, all references herein to “uBid,” “we,” “us,” and “our” refer
      to uBid.com Holdings, Inc. and our subsidiary.





Information
      in the following Management's Discussion and Analysis of Financial Condition
      and
      Results of Operations and elsewhere in this quarterly report contains
      forward-looking statements within the meaning of Section 27A of the Securities
      Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
      Forward-looking statements provide current expectations or forecasts of future
      events and can be identified by the use of terminology such as “believe,”
“estimate,” “expect,” “intend,” “may,” “could,” “will,” and similar words or
      expressions. Any statement that is not a historical fact, including statements
      regarding estimates, projections, future trends and the outcome of events that
      have not yet occurred, is a forward-looking statement. Actual results could
      differ materially from those projected in the forward-looking statements as
      a
      result of a number of factors, including but not limited to the risk factors
      detailed in our filings with the SEC, including our Annual Report on Form 10-K
      for the year ended December 31, 2006. We assume no obligation to update such
      forward-looking statements or to update the reasons actual results could differ
      materially from those anticipated in such forward-looking statements.





**Overview**





We
      operate a leading online marketplace located at www.ubid.com offering
      high quality excess, new, overstock, close-out, refurbished and limited supply
      brand name merchandise to both consumers and businesses using auction style
      and
      fixed price formats. We offer consumers a trustworthy buying environment in
      which we continually monitor and certify activity to eliminate the potential
      for
      fraud by certifying all merchants and processing 100% of all transactions
      between buyers and sellers. Our marketplace offers brand-name merchandise from
      over 200 product categories including computer products, consumer electronics,
      apparel, housewares, watches, jewelry, travel, sporting goods, home improvement
      products and collectibles.





Our
      business model provides value for consumers, manufacturers, distributors,
      retailers and other approved third party merchants. Consumers shop in a
      trustworthy and secure online marketplace and have the opportunity to bid their
      own prices on popular, brand-name products realizing product savings of
      generally 20% to 80% off retail prices. Our online marketplace provides
      merchants with an efficient and economical distribution channel for maximizing
      revenue on their merchandise. Merchants can monetize overstock and close-out
      inventory, expand their customer base and increase sales without compromising
      existing distribution channels.




Our
      business model consists of three distinct business channels: uBid Direct, UCM
      and Business to Business.




We
      purchase merchandise outright in the uBid Direct and Business to Business
      channels and sell to consumers and businesses. On this merchandise, we bear
      the
      inventory, return and credit risk. The full sales amount is recorded as revenue
      upon verification of the credit card transaction and shipment of the
      merchandise.




We
      also
      sell merchandise through the UCM Program channel by allowing prescreened third
      party merchants to sell their product through our online marketplace to
      consumers and business. On this merchandise, we do not take title and therefore
      do not bear the related inventory risk. In the UCM Program, we are the primary
      obligor to whom payment is due, but we bear no inventory or returns risk, so
      we
      record only our commission as revenue.




14




In
      all
      instances where the credit card authorization has been received but merchandise
      has not been shipped, we defer revenue recognition until the merchandise is
      shipped.




Our
      online marketplace is available 24 hours a day, seven days a week and we
      currently offer over 200,000 items each day. Since the first offer of product
      in
      December 1997, our marketplace has facilitated over $1 billion in net revenues
      and has registered over five million members.





**Executive
      Commentary**




***Success
      Measures*** :
      Our
      management believes that the most important financial and non-financial measures
      that track our progress include sales, website traffic, total average order
      value, gross margin, customer acquisition costs, advertising expense, personnel
      costs, and fulfillment costs.




**Key
      Business Metrics** We
      periodically review key business metrics to evaluate the effectiveness of our
      operational strategies and the financial performance of our business. These
      key
      metrics include the following:





***Gross
      Merchandise Sales (GMS)***




Gross
      Merchandise Sales differ from GAAP revenue in that gross bookings represents
      the
      gross sales price of goods sold by the Company (including sales through our
      UCM
      Program) before returns, sales discounts, and cancellations.





***Number
      of Orders***




This
      represents the total number of orders shipped in a specified period. We analyze
      the number of orders by category to evaluate the effectiveness of our
      merchandising and advertising strategies as well as to monitor our inventory
      management.




***Average
      Order Value***




Average
      order value is the ratio of gross sales divided by the number of orders shipped
      within a given time period. We analyze average order value by category primarily
      to manage costs and other operating expenses.




***Visitors***




A
      Visitor
      is a consumer or business that voluntarily clicks through to the website
      (uBid.com) using both online and offline advertising stimulus. Visitors don’t
      include third party site pops, pop unders, or non converting impressions to
      the
      website. Examples of online marketing channels we advertise on are: affiliate
      banner networks, comparison shopping sites, paid and organic search engines,
      and
      email.





***Bidders***




A
      Bidder
      is a visitor that places a bid on an item up for auction on the website
      (uBid.com).





***Visitors
      to Bidder Conversion***




The
      percentage of visitors that bid on an auction item. We use this as a measure
      of
      the effectiveness of advertising.




***Approved
      UCM Program Vendors***




Vendors
      that have gone through the approval process to sell merchandise through our
      website.




15




**(In
                  Thousands except Average Order Value and Approved UCM
                  Vendors)****Q2
                  2007**
              
              **Q1
                  2007**
              
              **Q4
                  2006**
              
              **Q3
                  2006**
              
              **Q2
                  2006**
              
              **Q1
                  2006**
              
              **Q4
                  2005**
              
              **Q3
                  2005****Measure**GMS
                  (in thousands)
              
              $
              26,368
              
              $
              23,402
              
              $
              26,276
              
              $
              26,528
              
              $
              30,286
              
              $
              31,167
              
              $
              31,035
              
              $
              27,215Number
                  of orders (in thousands)Direct
              
              
              29
              
              
              21
              
              
              24
              
              
              23
              
              
              37
              
              
              36
              
              
              43
              
              
              36uBid
                  Certified Merchant
              
              
              98
              
              
              104
              
              
              99
              
              
              89
              
              
              88
              
              
              87
              
              
              93
              
              
              72Total
                  orders
              
              
              127
              
              
              125
              
              
              123
              
              
              112
              
              
              125
              
              
              123
              
              
              136
              
              
              108Average
                  Order ValueDirect
              
              $
              336
              
              $
              390
              
              $
              424
              
              $
              424
              
              $
              416
              
              $
              465
              
              $
              398
              
              $
              495uBid
                  Certified Merchant
              
              $
              119
              
              $
              120
              
              $
              126
              
              $
              128
              
              $
              110
              
              $
              107
              
              $
              108
              
              $
              112Visitors
                  (in thousands)
              
              
              6,901
              
              
              6,744
              
              
              6,529
              
              
              6,488
              
              
              7,215
              
              
              6,369
              
              
              7,051
              
              
              8,287Bidders
                  (in thousands)
              
              
              231
              
              
              235
              
              
              239
              
              
              211
              
              
              255
              
              
              241
              
              
              267
              
              
              222Bidders
                  to Visitors Percentage
              
              
              3.3
              %
              
              3.5
              %
              
              3.7
              %
              
              3.3
              %
              
              3.5
              %
              
              3.8
              %
              
              3.8
              %
              
              2.7
              %Approved
                  UCM Vendors
              
              
              2,873
              
              
              2,513
              
              
              2,049
              
              
              1,716
              
              
              1,307
              
              
              949
              
              
              628
              
              
              401


***Revenue
      Source*** :
 
      We derive most of our revenue from sales of products to consumers and businesses
      as well as commission revenue earned for sales of merchandise under revenue
      sharing agreements with third party sellers. We believe that the principal
      drivers of our revenue consist of the average order value placed by our
      customers, the number of orders placed by both existing and new customers,
      special offers we make available that result in incremental orders, our ability
      to attract new customers and advertising that impacts our revenue drivers.
      Sales
      consist of orders placed through our uBid.com website and direct business to
      business sales. We further generate revenue from shipping fees we charge our
      customers and advertising sales. We record our revenue net of returns and other
      discounts. Our revenues may fluctuate from period to period as a result of
      special offers we provide such as free shipping, and other special
      promotions.





Our
      revenue is dependent in part on sales of products produced by or purchased
      from
      Sony Electronics, Inc. (“Sony”), Hewlett-Packard Company (“HP”), and Recoupit,
      Inc.(“Recoupit”). The following table represents the respective vendors’
percentage of sales for the three and six months ended June 30, 2007. No other
      supplier represented more than 5% of our net revenues for any period
      presented.


**Three
                  months ended**
              
              **Six
                  months ended****June
                  30,**
              
              **June
                  30,****Vendor**
              
              **2007**
              
              **2006**
              
              **2007**
              
              **2006**HP
              
              
              27.1
              %
              
              11.5
              %
              
              22.9
              %
              
              12.0
              %Recoupit
              
              
              7.9
              %
              
              4.5
              %
              
              7.4
              %
              
              4.4
              %Sony
              
              
              13.6
              %
              
              17.8
              %
              
              14.7
              %
              
              15.0
              %





***Cost
      of Revenues*** :
      Cost of
      revenues primarily consists of the cost of the product and inbound and outbound
      shipping. There is no cost of revenues for UCM Program revenue. Cost of revenues
      does not include order fulfillment costs, which are included in general and
      administrative expenses.





***Gross
      Profits*** :
      Our
      gross profit margins are impacted by a number of factors including the category
      of merchandise, the introduction of new product categories, the mix of sales
      among our product categories, pricing of products by our vendors, pricing
      strategies, promotional programs, market conditions, packaging, excess and
      obsolete inventory charges and other factors. Gross profits and gross profit
      percentages are not comparable to gross profit and gross profit percentages
      reported by companies that include order fulfillment costs in the cost of
      revenues.





***Expenses*** *:* Sales
      and marketing, general and administrative (“SG&A”) expenses consist
      primarily of sales and marketing expenses, including online marketing
      activities, order fulfillment and other costs, such as personnel, rent,
      warehouse and handling, common area maintenance, depreciation, credit card
      processing charges, insurance, legal and accounting fees. Interest expense
      charges are from our IBM flooring facility at a rate of 1% per month on the
      outstanding balances, interest and amortization of loan origination fees related
      to our credit facility.




16





**Results
      of Operations (Dollars in Thousands, except per share, order and visitor
      data)**





The
      following table sets forth, for the periods presented, certain data from our
      statement of operations as a percentage of net revenues. This information should
      be read in conjunction with our financial statements and notes thereto included
      elsewhere in this report.


**(Dollars
                  in Thousands)****Three
                  months ended June 30,**
              
              **Six
                  months ended June 30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Net
                  Revenues:Direct
              
              $
              9,002
              
              
              65.9
              %
              $
              14,949
              
              
              78.3
              %
              $
              16,770
              
              
              72.1
              %
              $
              31,253
              
              
              79.8
              %UCM
              
              
              1,341
              
              
              9.8
              %
              
              1,059
              
              
              5.5
              %
              
              2,797
              
              
              12.0
              %
              
              2,068
              
              
              5.3
              %Business
                  to Business
              
              
              3,035
              
              
              22.2
              %
              
              2,992
              
              
              15.7
              %
              
              3,096
              
              
              13.3
              %
              
              5,679
              
              
              14.5
              %Other
              
              
              285
              
              
              2.1
              %
              
              97
              
              
              0.5
              %
              
              607
              
              
              2.6
              %
              
              185
              
              
              0.5
              %Total
                  Net Revenues
              
              
              13,663
              
              
              100
              %
              
              19,097
              
              
              100
              %
              
              23,270
              
              
              100
              %
              
              39,185
              
              
              100
              %Gross
                  Profit:Direct
              
              
              873
              
              
              6.4
              %
              
              892
              
              
              4.7
              %
              
              1,633
              
              
              7.0
              %
              
              2,314
              
              
              5.9
              %UCM
              
              
              1,341
              
              
              9.8
              %
              
              1,059
              
              
              5.5
              %
              
              2,797
              
              
              12.0
              %
              
              2,068
              
              
              5.3
              %Business
                  to Business
              
              
              370
              
              
              2.7
              %
              
              69
              
              
              0.4
              %
              
              384
              
              
              1.7
              %
              
              459
              
              
              1.2
              %Other
              
              
              285
              
              
              2.1
              %
              
              97
              
              
              0.5
              %
              
              607
              
              
              2.6
              %
              
              185
              
              
              0.5
              %Total
                  Gross Profit
              
              
              2,869
              
              
              21.0
              %
              
              2,117
              
              
              11.1
              %
              
              5,421
              
              
              23.3
              %
              
              5,026
              
              
              12.8
              %General
                  and administrative
              
              
              3,326
              
              
              24.3
              %
              
              3,451
              
              
              18.1
              %
              
              6,348
              
              
              27.3
              %
              
              6,984
              
              
              17.8
              %Sales
                  and marketing
              
              
              1,131
              
              
              8.3
              %
              
              1,436
              
              
              7.5
              %
              
              2,200
              
              
              9.5
              %
              
              2,961
              
              
              7.6
              %Total
                  operating expenses
              
              
              4,457
              
              
              32.6
              %
              
              4,887
              
              
              25.6
              %
              
              8,548
              
              
              36.7
              %
              
              9,945
              
              
              25.4
              %Loss
                  from operations
              
              
              (1,588
              )
              
              (11.6)
              %
              
              (2,770
              )
              
              (14.5)
              %
              
              (3,127
              )
              
              (13.4)
              %
              
              (4,919
              )
              
              (12.6)
              %Interest
                  Income / (Expense) & Other, Net
              
              
              51
              
              
              0.4
              %
              
              49
              
              
              0.3
              %
              
              114
              
              
              0.5
              %
              
              195
              
              
              0.5
              %Other
                  Income / (Expense)
              
              
              -
              
              
              -
              %
              
              -
              
              
              -
              %
              
              60
              
              
              0.0
              %
              
              -
              
              
              -
              %Net
                  Loss
              
              $
              (1,537
              )
              
              (11.2)
              %
              $
              (2,721
              )
              
              (14.2)
              %
              $
              (2,953
              )
              
              (12.7)
              %
              $
              (4,724
              )
              
              (12.1)
              %




**Comparison
      of Three Months ended June 30, 2007 and June 30, 2006**





Net
      loss
      for the three months ended June 30, 2007 was $1,537 or $0.08 basic and diluted
      loss per share. For the three months ended June 30, 2006, the loss was $2,721
      or
      $0.13 basic and diluted loss per share. The loss decreased by $1,184 or 43.5%
      from the same period in the prior year.





***Direct
      Channel:*** Direct
      channel sales decreased $5,947 or 39.8% to $9,002 for the three months ended
      June 30, 2007 compared to direct sales of $14,949 in the same period last year.
      In the current period the number of direct orders decreased 8,000 or 21.6%
      and
      the average order value decreased $80.00 or 19.2% to $336.00 per order. The
      decline in the number of direct orders is primarily due to a shift from the
      Direct channel sales to the UCM platform in which only commission revenue is
      recorded and an improved effort in managing product posted for
      auction. The
      decrease in the average order value was due primarily to decreases in video,
      portable audio and digital cameras. The decreases were offset by increases
      in
      flat-screen LCD televisions and notebook computers.





The
      Direct channel gross profit decreased $19 or 2.1% for the three months ended
      June 30, 2007 compared to the same period in the prior year. The Direct channel
      gross profit percentage increased 3.7% to 9.7% for the three months ended June
      30, 2007 compared to 6.0% for the three months ended June 30, 2006. The increase
      was a result of an
      improved effort in managing product posted for auction.  The
      decreased order volume resulted in lower distribution and variable operating
      costs which offset the margin dollar loss and improved the overall
      profitability.





***UCM
      Channel:*** ** UCM
      revenues and gross profit increased $282 or 26.6% to $1,341 for the three months
      ended June 30, 2007 compared to revenue and gross profit of $1,059 in the same
      period of the prior year. In the current period the number of UCM orders
      increased 10,000 or 11.4% and the average order value increased $9.00 or 8.2%
      to
      $119.00 per order. The number of UCM vendors increased 1,566 or 120.0% to 2,873
      vendors compared to 1,307 at June 30, 2006. The increase in UCM orders and
      the
      average order value is primarily due to the shift of revenue and volume from
      the
      Direct sales channel to the UCM channel along with the increase in the number
      of
      UCM vendors.




17





***Business
      to Business:*** Business
      to Business revenues increased $43 or 1.4 % for the three months ended June
      30,
      2007 compared to the same period in the prior year. Gross profit increased
      $301
      or 436.0% to $370 for the quarter ended June 30, 2007 compared to $69 for the
      quarter ended June 30, 2006. The gross profit percentage increased to 12.2%
      for
      the three months ended June 30, 2007 compared to 2.3% in the same period of
      the
      prior year.





***Other
      Revenue:*** Other
      revenue and gross profit primarily comprised of online advertising revenue
      increased $188 or 193.0% for the three months ended June 30, 2007. The increase
      resulted from the enlistment of several new advertising customers on our
      website. During the current quarter we implemented Google AdSense, a contextual
      online advertising system that searches our web-pages and determines which
      advertisements are most beneficial. Google then populates our website in
      pre-designated areas with the advertisements that based on a calculation would
      maximize revenue. The Google AdSense program generated $66 for the three months
      ended June 30, 2007.




18




***Sales
      and Marketing, General and Administrative Expenses:*** SG&A
      expenses for the quarter ended June 30, 2007 were $4,457, a decrease of $430
      or
      8.8%, compared to the quarter ended June 30, 2006.





**(Dollars
                in Thousands)****Three
                Month Period Ended****SG&A
                  Expenses:**
            
            **June
                30, 2007**
            
            **June
                30, 2006**
            
            **Increase
                (Decrease)**Advertising
            
            $
            993
            
            $
            1,285
            
            $
            (292
            )Salary
                and benefits
            
            
            1,245
            
            
            1,546
            
            
            (301
            )Stock-based
                compensation
            
            
            127
            
            
            230
            
            
            (103
            )Facilities
            
            
            122
            
            
            161
            
            
            (39
            )Warehouse
            
            
            185
            
            
            304
            
            
            (119
            )Credit
                card fees
            
            
            531
            
            
            596
            
            
            (65
            )Telecommunications,
                hardware and storage
            
            
            170
            
            
            207
            
            
            (37
            )Legal,
                audit, insurance, and other regulatory fees
            
            
            276
            
            
            260
            
            
            16Depreciation
                & amortization
            
            
            227
            
            
            73
            
            
            154Bad
                debt
            
            
            352
            
            
            -
            
            
            352Consulting
                and outside services
            
            
            174
            
            
            121
            
            
            53Other
                SG&A
            
            
            55
            
            
            104
            
            
            (49
            )$
            4,457
            
            $
            4,887
            
            $
            (430
            )





Advertising
      expense decreased $292 or 22.7% and visitors decreased 317,000 or 4.3% as we
      continued to eliminate the least effective marketing efforts to optimize
      profitable online campaigns including television and print campaigns. The cost
      per visitor decreased to $0.14 per visitor from $0.18 per visitor in the same
      period of the prior year.





Salary
      and benefits expense decreased $301 or 19.5% as a result of eliminating certain
      positions in the third quarter 2006. This reduction in positions also led to
      a
      $103 or 44.8% decrease in stock based compensation.





Facilities
      expense decreased $39 or 24.2% due to the relocation of our corporate office
      to
      a larger facility with a lower lease cost.





Warehouse
      expense and credit card fees decreased $119 or 39.1% and $65 or 10.9%,
      respectively, due to the lower sales volume.





Telecommunications,
      hardware and storage expenses decreased $37 as a result of negotiating new
      maintenance contracts with favorable rates.





The
      decreases in expenses were offset by increases in depreciation and amortization,
      bad debt expense and consulting of $154, $352 and $53, respectively. The
      increase in depreciation and amortization was a result of the purchase of
      intangible assets and computer equipment. The increase in bad debt expense
      is
      attributable to a partial settlement of an aged receivable resulting in a
      write-off of the remaining balance. Consulting and outside services expense
      increased as temporary help was brought in to the advertising department to
      help
      with several projects.





***Other
      Expense:*** Net
      interest income was $51 for the quarter ended June 30, 2007 versus interest
      income of $106 for the quarter ended June 30, 2006. The decrease in net interest
      income is attributed to increased interest expense relating to the minimum
      interest payment due under the credit facility terms. The Company retired all
      debt after receiving the capital raised on December 29, 2005.





***Net
      Losses:*** The
      Company experienced a net loss of $1,537 or $.08 per share for the quarter
      ended
      June 30, 2007 compared to a net loss of $2,721 or $.13 per share for the quarter
      ended June 30, 2006.





19





**Comparison
      of Six Months ended June 30, 2007 and June 30, 2006**





Net
      loss
      for the six months ended June 30, 2007, was $2,953 or $0.15 basic and diluted
      loss per share. For the six months ended June 30, 2006, the loss was $4,724
      or
      $0.23 basic and diluted loss per share. The loss decreased by $1,771 or 37.5%
      from the same period in the prior year.





***Direct
      Channel:*** Direct
      channel sales decreased $14,483 or 46.3% to $16,770 for the six months ended
      June 30, 2007 compared to Direct sales of $31,253 in the same period of the
      prior year. In the current period the number of direct orders decreased 23,000
      or 31.5% and the average order value decreased by $155 or 17.6% per order. The
      decline in the number of direct orders continues to be due to a shift
      from the Direct channel sales to the UCM platform in which only commission
      revenue is recorded and an improved effort in managing product posted for
      auction. The
      decrease in the average order value was due primarily to decreases in video,
      portable audio and digital cameras.





The
      Direct channel gross profit decreased by $382 or 29.5% for the six months ended
      June 30, 2007 compared to the prior year. The Direct channel gross profit
      percentage increased 2.3% to 9.7% for the six months ended June 30, 2007
      compared to 7.4% for the six months ended June 30, 2006. The increase was a
      result of an
      improved effort in managing product posted for auction.





***UCM
      Channel:*** UCM
      revenues and gross profit increased $729 or 35.3% to $2,797 for the six months
      ended June 30, 2007 compared to revenue and gross profit of $2,068 in the same
      period of the prior year. In the current period the number of UCM orders
      increased 27,000 or 15.4% and the average order value increased to $11.00 or
      10.1% per order. The UCM orders and the average order value increased primarily
      due to the shift of revenue and volume from the Direct sales channel to the
      UCM
      channel along with the increase in the number of UCM vendors.





***Business
      to Business:*** Business
      to Business revenues decreased $2,583 or 45.5% for the six months ended June
      30,
      2007 compared to the same period in the prior year. In the three months ended
      March 31, 2007 we had sales of $62 versus $2,687 in the same period of the
      prior
      year primarily due to not having a dedicated Business to Business sales force.
      For the three months ended June 30, 2007 we had sales of $3,035 compared to
      sales of $2,992 for the three months ended June 30, 2006 due to the hiring
      of a
      new sales force in the period.





Gross
      profit decreased $75 or 16.3% to $384 for the six months ended June 30, 2007
      compared to $459 for the six months ended June 30, 2006. The gross profit
      percentage increased to 12.4% for the six months ended June 30, 2007 compared
      to
      8.1% in the same period of the prior year.





***Other
      Revenue:*** Other
      revenue and gross profit primarily comprised of online advertising revenue
      increased $422 or 228.0% for the six months ended June 30, 2007. The increase
      resulted from the enlistment of several new advertising customers on our
      website.




20




***Sales
      and Marketing, General and Administrative Expenses:*** SG&A
      expenses for the six months ended June 30, 2007 were $8,548, a decrease of
      $1,398 or 14.1%, compared to the six months ended June 30, 2006.


**(Dollars
                  in Thousands)****Six
                  Month Period Ended****SG&A
                    Expenses:**
              
              **June
                  30, 2007**
              
              **June
                  30, 2006**
              
              **Increase
                  (Decrease)**Advertising
              
              $
              1,961
              
              $
              2,618
              
              $
              (657
              )Salary
                  and benefits
              
              
              2,522
              
              
              3,114
              
              
              (592
              )Stock-based
                  compensation
              
              
              365
              
              
              460
              
              
              (95
              )Facilities
              
              
              265
              
              
              316
              
              
              (51
              )Warehouse
              
              
              360
              
              
              589
              
              
              (229
              )Credit
                  card fees
              
              
              1,043
              
              
              1,283
              
              
              (240
              )Telecommunications,
                  hardware and storage
              
              
              324
              
              
              415
              
              
              (91
              )Legal,
                  audit, insurance, and other regulatory fees
              
              
              423
              
              
              531
              
              
              (108
              )Depreciation
                  & amortization
              
              
              409
              
              
              143
              
              
              266Bad
                  debt
              
              
              352
              
              
              -
              
              
              352Consulting
                  and outside services
              
              
              343
              
              
              230
              
              
              113Related
                  party management fees
              
              
              -
              
              
              30
              
              
              (30
              )Other
                  SG&A
              
              
              181
              
              
              217
              
              
              (36
              )$
              8,548
              
              $
              9,946
              
              $
              (1,398
              )





Advertising
      expense decreased $657 or 25.1% as we continued to eliminate the least effective
      marketing efforts to optimize profitable online campaigns including television
      and print campaigns. The cost per visitor decreased to $0.14 per visitor from
      $.019 per visitor in the same period of the prior year.





Salary
      and benefits expense decreased $592 or 19.0% as a result of eliminating certain
      positions in the third quarter 2006. This reduction in positions also led to
      a
      $95 or 20.7% decrease in stock based compensation.





Facilities
      expense decreased $51 or 16.1% due to the relocation of our corporate office
      to
      a larger facility with a lower lease cost.





Warehouse
      expense and credit card fees decreased $229 or 38.9% and $240 or 18.7%,
      respectively, due to lower Direct channel sales volume.





Telecommunications,
      hardware and storage expenses decreased $91 as a result of negotiating new
      maintenance contracts with favorable rates.





Legal,
      audit, insurance and other regulatory fees decreased $108 or 20.3% primarily
      as
      a result of lower insurance premiums and legal fees. The Company completed
      its
      private placement on February 3, 2006 and Company’s registration statement on
      Form S-1 was declared effective on July 21, 2006. The expenses were higher
      in
      the first quarter of 2006 due to closing of the private placement as well as
      the
      registration statement which was in the process of being declared
      effective.





The
      decreases in expenses were offset by increases in depreciation and amortization,
      bad debt and consulting of $266 or 186%, $352 or 100% and $113 or 49.1%,
      respectively. The increase in depreciation and amortization was a result of
      the
      purchase of intangible assets and computer equipment. The increase in bad debt
      is attributable to a bad debt incurred by Dibu Trading Corp., our business
      to
      business unit, for partial settlement of an aged debt. Consulting and outside
      services expense increased as temporary help was brought in to the advertising
      department to help with several projects.




21





***Other
      Expense:*** Net
      interest income was $115 for the year to date as of June 30, 2007 versus
      interest income of $195 for the same period 2006. The decrease in net interest
      income is attributed to increased interest expense relating to the minimum
      interest payment due under the credit facility terms. The Company retired all
      debt after receiving the capital raised on December 29, 2005.





***Net
      Losses:*** The
      Company experienced a net loss of $2,953 or $.15 per share for year to date
      as
      of June 30, 2007 compared to a net loss of $4,724 or $.23 per share for the
      same
      period 2006.




***Liquidity
      and Capital Resources***





Historically,
      our primary sources of capital have been cash flow from operations and loans
      from affiliated parties. More recently, our primary source of cash flow has
      been
      from operations and the $29.5 million raised in the December 29, 2005 private
      offering of our common stock and warrants.





Net
      cash
      used in operating activities for the six months ended June 30, 2007 was $2,913
      compared to $13,470 used in the six months ended June 30, 2006. The net cash
      used in operating activities in 2007 was primarily the result of our net loss
      and a $249 increase in inventory since the year ended December 31, 2006. The
      increase in inventory was offset by an increase in accounts payable as open
      trade terms with suppliers helped finance the inventory increase. The increase
      in inventories is intended to increase product available for auction. Accounts
      receivable increased $304 primarily due to the increased revenues in the
      business to business sales channel. Prepaid expenses and other current assets
      decreased $152 from the year ended December 31, 2006 as interest receivable
      of
      $124 was collected. In addition, a $50 rent deposit for the customer service
      center facility was returned to the Company. The decrease in accrued expenses
      of
      $479 was primarily the result of lower payroll accruals due to the reduced
      staffing and lower freight costs due to lower Direct channel sales
      volumes.





Net
      cash
      used in operating activities for the six months ended June 30, 2006 was $13,470.
      Inventory increased $3,471 or 58% from December 31, 2005. The increase in
      inventories was intended to reverse the decline in the Direct channel sales,
      but
      the declines in sales of computer related products stunted the growth and
      contributed to increased mark downs of inventory in these categories in 2006.
      Accounts receivable increased $1,849 due to the growth of the direct business
      to
      business channel and the nature of payment terms associated with this type
      of
      business. Additionally, accounts payable and accrued expenses decreased $3,895
      due to the timing of payments in 2006 and the tightening of payment terms with
      vendors in the Direct channel.





Net
      cash
      used in investing activities was $102 for the six months ended June 30, 2007
      due
      primarily to the purchase of property and equipment. Net cash provided by
      investing activities was $6,694 for the period ended June 30, 2006 primarily
      from a decrease in restricted investments as a result of the expiration of
      letters of credit that were no longer required as restricted
      collateral.





Net
      cash
      used by financing activities was $1,415 for the six months ended June 30, 2007,
      compared to a cash outflow of $836 for the same period last year. The cash
      outflow in 2007 is due to the stock repurchase offset by the decrease in
      inventory financed through the flooring facility. On April 25, 2007, the Company
      repurchased in a private transaction 2,135,550 shares of common stock and
      580,937 warrants at a combined price of $1.05 for the common stock and for
      the
      warrants for an aggregate total of $2,242,328 from a private investor. The
      repurchase represents 11% of the common stock and warrants currently
      outstanding.





For
      the
      period ended June 30, 2006, the majority of the cash used for financing
      activities related to the second part of the private offering of the
      Company’s units to accredited investors on February 3, 2006. In this
      offering, the Company sold 3,000,000 shares of its common stock
      and warrants to purchase 750,002 shares of its common stock on the
      same terms as described in Note 4 for an aggregate of $13.5
      million. The Company also redeemed 2,666,668 shares of common stock
      issued in connection with the merger and the first private offering
      that were subject to redemption at a price of $4.50 per share and issued
      600,667 shares of common stock (valued at $4.50 per share) to shareholders
      of
      Cape Coastal prior to the merger and uBid’s financial advisor, Calico Capital
      Group. In addition, the Company issued additional warrants to purchase
      90,000 shares of its common stock to its placement agents on the same
      terms as described in Note 4. The second part of the private offering resulted
      in no net cash proceeds being retained by the Company.





22


On
      May 9, 2006, the Company and its subsidiaries entered into a Credit and
      Security Agreement with Wells Fargo Bank, National Association acting through
      Wells Fargo Business Credit and related security agreements and other agreements
      described in the Credit and Security Agreement (the “Credit Agreement”). The
      Credit Agreement provides for advances to the Company of up to a maximum of
      $25,000. The amount actually available to the Company will vary from time to
      time, depending on, among other factors, the amount of eligible inventory and
      the amount of eligible accounts receivable. The obligations under the Credit
      Agreement and all related agreements are secured by all of the Company assets.
      The initial term of the Agreement is three years, expiring on April 28,
      2009. Up to $7,000 of the maximum amount is available for irrevocable, standby
      and documentary letters of credit. Advances under the Credit Agreement bear
      interest at a base rate (Wells Fargo Bank's prime rate) or LIBOR plus 2.5%.
      The
      Credit Agreement requires a prepayment fee of $500 if the Company terminates
      the
      Credit Agreement during its first year, $375  if
      it
      terminates the Credit Agreement during its second year and $125 if the Company
      terminates the Credit Agreement during the third year. The Credit Agreement
      requires the Company, among other things, to limit capital expenditures and
      maintain minimum availability on the line. Also, the Company is obligated
      contractually by a restrictive lock box arrangement. The Credit Agreement also
      requires the Company to pay a variety of other fees and expenses, including
      minimum annual interest of $120. The Company as of June 30, 2007 had $49 in
      deferred financing fees being amortized over the life of the Credit Agreement.
      As of June 30, 2007, the effective loan rate was 8.25% and the Company had
      no
      outstanding balance and was in compliance with all the loan
      covenants.





We
      believe that current working capital, together with cash flows from operations
      and availability under our credit facility will be adequate to support our
      current operating plans for at least the next 12 months.





**ITEM
      3.****QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**




We
      currently have little exposure to risks of fluctuating interest rates or
      fluctuating currency exchange rates. Accordingly, we do not believe that changes
      in interest or currency rates will have a material effect on our liquidity,
      financial condition or results of operations. It is our policy not to enter
      into
      derivative financial instruments.





**ITEM
      4.****CONTROLS
      AND PROCEDURES**





*Disclosure
      Controls and Procedures.* The
      Company maintains disclosure controls and procedures that have been designed
      to
      ensure that information related to the Company is recorded, processed,
      summarized and reported on a timely basis. We review these disclosure controls
      and procedures on a periodic basis. In connection with this review, we have
      established a compliance committee that is responsible for accumulating
      potentially material information regarding its activities and considering the
      materiality of this information. The compliance committee (or a subcommittee)
      is
      also responsible for making recommendations regarding disclosure and
      communicating this information to our Chief Executive Officer and Vice
      President, Finance to allow timely decisions regarding required disclosure.
      Our
      compliance committee is comprised of our principal risk management officer
      and
      other members of our management team.





Our
      Chief
      Executive Officer and Vice President, Finance, with the participation of the
      compliance committee, evaluated the effectiveness of the design and operation
      of
      our disclosure controls and procedures as of the end of the period covered
      by
      this Quarterly Report, as required by Rule 13a-15 of the Securities Exchange
      Act
      of 1934. Based on their evaluation of our disclosure controls and procedures,
      our Chief Executive Officer and Vice President, Finance believe that, as of
      the
      end of the period covered by this Quarterly Report, our disclosure controls
      and
      procedures are effective to ensure that information required to be disclosed
      by
      us in the reports we file or submit under the Securities Exchange Act of 1934
      is
      recorded, processed, summarized, and reported within the time periods specified
      in the rules and forms of the SEC.




23





***Internal
      Control Over Financial Reporting.*** There
      have been no changes in our internal control over financial reporting identified
      in the evaluation that occurred during the first quarter of fiscal year 2007
      that have materially affected, or are reasonably likely to materially affect,
      our internal control over financial reporting.




**PART
      II OTHER INFORMATION**





**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





From
      time
      to time we may be named in claims arising in the ordinary course of business.
      Currently, no legal proceedings or claims are pending against us or involve
      us
      that, in the opinion of our management, could reasonably be expected to have
      a
      material adverse effect on our business or financial condition.





**ITEM
      1A. RISK FACTORS**





In
      addition to other information set forth in this report, you should carefully
      consider the factors discussed in Part 1, “Item 1A. Risk Factors” in our Annual
      Report on Form 10-K for the year ended December 31, 2006, which could materially
      affect our business, financial condition or future results. The risks described
      in our Annual Report on Form 10-K are not the only risks facing the Company.
      Additional risks and uncertainties not currently known to us or that are
      currently deemed to be immaterial also may materially adversely affect our
      business, financial conditions and/or operating results.




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





For
      the
      three months ended June 30, 2007, options to purchase an aggregate of 50,000
      shares of our common stock were granted to individuals, all of whom joined
      the
      Company’s board of directors. Options to purchase an aggregate of 50,000 shares
      at $1.50 per share were granted on May 14, 2007. The options all have a term
      of
      ten years and vest over a four year period either quarterly or annually
      beginning on the first quarter or year respectively after the date of grant.
      The
      option grants were exempt from registration under Section 4(2) of the Securities
      Act of 1933, as amended, which provides an exemption for transactions not
      involving a public offering.





On
      April
      25, 2007, The Company entered into a stock repurchase agreement with a group
      of
      private investors under common management to repurchase 2,135,550 shares of
      the
      Company’s common stock and warrants to purchase 580,937 shares of the Company’s
      common stock held by such private investors for $1.05 per share or an aggregate
      purchase price of $2,242 These shares and warrants repurchased in this privately
      negotiated transaction were originally acquired by the private investors in
      the
      Company’s private placement that initially closed on December 29, 2005. The
      repurchase represented 11% of the common stock and warrants
      outstanding.





**ITEM
      3. DEFAULT UPON SENIOR SECURITIES**





None




**ITEM
      4.****SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**




None





**ITEM
      5. OTHER INFORMATION**





None





**ITEM
      6. EXHIBITS**





See
      Exhibit Index on page following signature pages.




24





**Exhibit
                No.**
            
            **Description**31.1
            
            Certification
                of the President and Chief Executive Officer pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002.31.2
            
            Certification
                of the Vice President, Finance pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of the President and Chief Executive Officer pursuant to 18 U.S.C.
                Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.32.2
            
            Certification
                of the Vice President, Finance pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.







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**SIGNATURES**





Pursuant
      to 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 as of August 14, 2007.


**UBID.COM
                HOLDINGS, INC.**By:
            /s/
                Miguel A. Martinez, Jr.Name:  Miguel
                A. Martinez, Jr.
              Title:
                  Vice President, Finance
              (Principal
                Financial Officer and Principal Accounting
                Officer)






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