================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------

                                    FORM 10-Q
(Mark One)

    [X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934

           For the quarterly period ended: March 31, 2009

                                       OR

    [ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

           For the transition period from _________________ to ________________

                        Commission file number: 000-16299
                                ----------------

                               ANTS SOFTWARE INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                13-3054685
    (State or other jurisdiction of         (IRS Employer Identification Number)
     Incorporation or Organization)

2040 Briggs Road, Suite B4, Mount Laurel, NJ              08054
   (Address of principal executive offices)             (Zip Code)

                                 (856) 914-5200
              (Registrant's Telephone Number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark whether the registrant has submitted  electronically
and  posted on its  corporate  Web site,  if any,  every  Interactive  Data File
required  to be  submitted  and posted  pursuant to Rule 405 of  Regulation  S-T
(ss.232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).  Yes [ ]
No [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated  filer, a  non-accelerated  or a smaller reporting  company.  See
definition of "accelerated  filer and large accelerated  filer" in Rule 12b-2 of
the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [X]
Non-accelerated filer [ ] Smaller reporting company [ ]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act.): Yes [ ] No [X]

     ANTs software inc. had 90,648,369  shares of common stock outstanding as of
May 18, 2009.
<PAGE>

                                TABLE OF CONTENTS
--------------------------------------------------------------------------------



                          PART I. Financial Information

Item 1.    Consolidated Financial Statements
            Consolidated Balance Sheets as of March 31, 2009 and
               December 31, 2008...............................................3
              Consolidated Statements of Operations for the Three Months
                ended March 31, 2009 and 2008 (restated)...................... 4
            Consolidated Statements of Cash Flows for the Three Months
               ended March 31, 2009 and 2008 (restated)....................... 5
            Consolidated Statements of Shareholders' Equity for the
               Three Months ended March 31, 2009 and 2008 (restated).......... 6
            Notes to Consolidated Financial Statements......................7-16
Item 2.    Management's Discussion and Analysis of Financial Condition
             and Results of Operations ....................................17-22
Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........23
Item 4.    Controls and Procedures............................................23



                           PART II. Other Information

Item 1.    Legal Proceedings  ................................................24
Item 1A.   Risk Factors.......................................................24
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds........24
Item 3.    Defaults Upon Senior Securities....................................24
Item 4.    Submission of Matters to a Vote of Security Holders................24
Item 5.    Other Information..................................................24
Item 6.    Exhibits...........................................................25
           Signatures.........................................................26
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S>                                                                     <C>              <C>

                                          ANTS SOFTWARE INC.
                                      CONSOLIDATED BALANCE SHEETS

                                                                          March 31,       December 31,
                                 ASSETS                                      2009             2008
                                                                        --------------   --------------
                                                                          Unaudited
                                                                        --------------   --------------
Current assets:
  Cash and cash equivalents                                             $      642,303   $    2,051,807
  Accounts receivable                                                          365,931          383,445
  Notes receivable from customer                                             2,000,000        2,000,000
  Restricted cash                                                              125,000          125,000
  Current portion of prepaid debt issuance cost                                      -            4,121
  Prepaid expenses and other current assets                                    139,682          160,723
                                                                        --------------   --------------
    Total current assets                                                     3,272,916        4,725,096

Property and equipment, net                                                    359,437          399,093
Other intangible assets, net                                                 5,295,834        5,504,081
Goodwill                                                                    22,761,517       22,761,517
Other assets                                                                    34,898           67,018
                                                                        --------------   --------------
    Total assets                                                        $   31,724,602   $   33,456,805
                                                                        ==============   ==============

                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and other accrued expenses                           $    1,921,162   $    1,445,043
  Line of credit                                                               200,000          200,000
  Current portion of convertible promisory notes, net of debt
     discount of $- and $15,916, respectively                                  200,000          234,084
  Deferred revenue                                                             400,530          487,121
                                                                        --------------   --------------
    Total current liabilities                                                2,721,692        2,366,248

Long-term liabilities:
  Convertible promissory notes, net of debt discount of $7,788,870
    and $8,549,964, respectively                                             3,464,356        2,703,260
  Deferred tax liability                                                       344,000          344,000
                                                                        --------------   --------------
    Total liabilities                                                        6,530,048        5,413,508
                                                                        --------------   --------------

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $0.0001 par value; 50,000,000 shares authorized;
    no shares issued and outstanding                                                 -                -
  Common stock, $0.0001 par value; 200,000,000 shares authorized;
    90,648,369 shares issued and outstanding as of March 31, 2009
    and December 31, 2008                                                        9,065            9,065
  Additional paid-in capital                                               116,218,466      115,963,846
  Accumulated deficit                                                     (91,032,977)     (87,929,614)
                                                                        --------------   --------------
    Total stockholders' equity                                              25,194,554       28,043,297
                                                                        --------------   --------------
Total liabilities and stockholders' equity                              $   31,724,602   $   33,456,805
                                                                        ==============   ==============

See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       3
<PAGE>
<TABLE>
<S>                                                   <C>               <C>
                 ANTS SOFTWARE INC.
        CONSOLIDATED STATEMENTS OF OPERATIONS
                     (Unaudited)
                                                         For the Three Months Ended
                                                                 March 31,
                                                      --------------------------------
                                                                            2008
                                                           2009           (restated)
                                                      --------------    --------------
Revenues:
  Products                                            $           -     $      28,219
  Services                                                1,388,357             4,165
                                                      --------------    --------------
      Total revenues                                      1,388,357            32,384

Cost of Revenues:
  Products                                                        -                 -
  Services                                                1,225,770            44,419
                                                      --------------    --------------
        Gross profit (loss)                                 162,587           (12,035)
                                                      --------------    --------------

Operating Expenses:
  Sales and marketing                                       517,305           326,892
  Research and development                                  535,957         2,601,123
  General and administrative                              1,144,629           993,226
                                                      --------------    --------------

      Total operating expenses                            2,197,891         3,921,241
                                                      --------------    --------------

        Loss from operations                             (2,035,304)       (3,933,276)
                                                      --------------    --------------

Other income (expense):
  Interest income                                             2,483            27,002
  Other                                                       1,945                 -
  Interest expense                                       (1,072,487)         (830,186)
                                                      --------------    --------------

        Other income (expense), net                      (1,068,059)         (803,184)
                                                      --------------    --------------

Net loss before income taxes                             (3,103,363)       (4,736,460)
Income taxes                                                      -                 -
                                                      --------------    --------------
        Net loss                                      $  (3,103,363)    $  (4,736,460)
                                                      ==============    ==============

Basic and diluted net loss per common share           $       (0.03)    $       (0.08)
                                                      ==============    ==============
Shares used in computing basic and diluted
  net loss per share                                     90,648,369        57,792,266
                                                      ==============    ==============

See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       4
<PAGE>

<TABLE>
<S>                                                    <C>        <C>        <C>              <C>              <C>
                                                       ANTS SOFTWARE INC.
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                                          (Unaudited)

                                                         Common Stock
                                                    ----------------------        Additional      Accumulated
                                                       Shares     Amount        Paid-in Capital     Deficit          Total
                                                    ----------------------------------------------------------------------------
   Balance at December 31, 2008                        90,648,369  $   9,065  $   115,963,846  $  (87,929,614)  $    28,043,297

Share-based compensation expense- employees                                           240,869                           240,869
Share-based compensation expense- non-employees                                        13,751                            13,751
Net loss                                                                                           (3,103,363)       (3,103,363)
                                                    ------------- ---------- ---------------- ---------------- -----------------
   Balance at March 31, 2009                           90,648,369  $   9,065  $   116,218,466  $  (91,032,977)  $    25,194,554
                                                    ============= ========== ================ ================ =================

   Balance at December 31, 2007 (restated)             57,398,445  $   5,740  $    74,957,098  $  (76,301,030)  $    (1,338,193)

Proceeds from private placements, net of cash
  commissions of $104,100                               1,892,727        189          936,711                           936,900
Share-based compensation expense - employees                                        1,120,985                         1,120,985
Share-based compensation expense - non-employees                                       28,034                            28,034
Net loss                                                                                           (4,736,460)       (4,736,460)
                                                    ----------------------------------------------------------------------------
   Balance at March 31, 2008 (restated)                59,291,172  $   5,929  $    77,042,828  $  (81,037,490)  $    (3,988,734)
                                                    ============= ========== ================ ================ =================


See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       5
<PAGE>

<TABLE>
<S>                                                                             <C>                 <C>
                               ANTS SOFTWARE INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                                                For the Three Months Ended March 31,
                                                                                ------------------------------------
                                                                                                          2008
                                                                                      2009             (restated)
                                                                                ----------------    ----------------
Cash flows from operating activities:
  Net loss                                                                      $    (3,103,363)    $    (4,736,460)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                       270,962              93,848
    Amortization of warrant issued to customer                                                -              14,418
    Amortization of discount and prepaid debt issuance cost on notes payable            781,133             589,157
    Stock-based compensation expense                                                    254,620           1,149,019
  Changes in operating assets and liabilities:
    Accounts receivable                                                                  17,514             (31,961)
    Restricted cash                                                                           -              67,574
    Prepaid expenses and other assets                                                    53,161              16,956
    Accounts payable and other accrued expenses                                         476,119             (21,893)
    Deferred revenue                                                                    (86,591)              8,181
                                                                                ----------------    ----------------
      Net cash used in operating activities                                          (1,336,445)         (2,851,161)
                                                                                ----------------    ----------------

Cash flows from investing activities:
    Purchases of property                                                               (23,059)            (25,023)
                                                                                ----------------    ----------------
      Net cash used in investing activities                                             (23,059)            (25,023)
                                                                                ----------------    ----------------

Cash flows from financing activities:
    Proceeds from private placements - equity, net of cash commissions of $104,100            -             936,900
    Payments made on convertible promissory notes                                       (50,000)                  -
                                                                                ----------------    ----------------
      Net cash (used in) provided by financing activities                               (50,000)            936,900
                                                                                ----------------    ----------------

Net decrease in cash and cash equivalents                                            (1,409,504)         (1,939,284)
                                                                                ----------------    ----------------
Cash and cash equivalents at beginning of period                                      2,051,807           4,480,694
                                                                                ----------------    ----------------
Cash and cash equivalents at end of period                                      $       642,303     $     2,541,410
                                                                                ================    ================


Supplemental disclosure of cash flow information:
  Cash paid during the period for:
       Interest                                                                 $       297,416     $       241,030
                                                                                ================    ================

See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       6
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. Restatement

The Company has restated  its  financial  statements  for the three months ended
March 31, 2008 to correct errors in such financial statements.

The restatement of the Company's financial  statements is based upon a review of
the  accounting  treatment of certain  transactions  entered into by the Company
with  certain  investors  in 2006 and 2007.  During  this  review,  the  Company
discovered that it had incorrectly applied a restriction  discount to the market
value of its common stock based on a long history of selling  restricted  common
stock to a group of investors.  The discounted  stock price was then used in the
allocation  of  proceeds  between  debt and  equity  for  units  of  convertible
promissory  notes and  restricted  common  shares that were sold to investors in
late 2006 and early 2007. The discounted  stock price was also used to determine
if there was a  beneficial  conversion  related  to the  convertible  promissory
notes.  The same  methodology  was used in late  2007  when the  Company  issued
convertible promissory notes along with common stock warrants.

The following  tables present the effects of the restatement  adjustments on the
Company's  balance  sheet as of March 31, 2008 and its  statements of operations
and cash flows for the three months ended March 31, 2008.

                                       7
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

<TABLE>
<S>                                                                 <C>                <C>             <C>
1. Restatement (Continued)

                                           RESTATED UNAUDITED BALANCE SHEET
----------------------------------------------------------------------------------------------------------------------

                                                                                      March 31, 2008
                                                                    --------------------------------------------------
                                                                     As Previously
                               ASSETS                                   Reported       Adjustments       As Restated
                                                                    ----------------   ------------    ---------------
Current assets:
  Cash and cash equivalents                                         $     2,541,410    $         -     $    2,541,410
  Accounts receivable                                                        40,165              -             40,165
  Restricted cash                                                           125,000              -            125,000
  Current portion of prepaid debt issuance cost                             373,759        (16,608)(a)        357,151
  Prepaid expenses and other current assets                                 145,059              -            145,059
  Prepaid expense from warrant issued to customer, net                       43,255              -             43,255
                                                                    ----------------   ------------    ---------------
    Total current assets                                                  3,268,648        (16,608)         3,252,040
Property and equipment, net                                                 441,665              -            441,665
Other assets                                                                 34,420              -             34,420
                                                                    ----------------   ------------    ---------------
    Total assets                                                    $     3,744,733    $   (16,608)    $    3,728,125
                                                                    ================   ============    ===============

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and other accrued expenses                       $       959,517    $         -     $      959,517
  Current portion of convertible promissory notes, net of                                        -
    premium of $339,924 and discount of $2,430,095 (restated),
    respectively                                                          6,839,924     (2,770,019)(b)      4,069,905
    Accrued interest on convertible promissory notes                        237,581                           237,581
  Deferred revenue                                                           56,999              -             56,999
                                                                    ----------------   ------------    ---------------
    Total current liabilities                                             8,094,021     (2,770,019)         5,324,002


Long-term liabilities:
  Convertible promissory notes, net of debt discount of $217,509 and
      $610,368 (restated), respectively                                   2,785,716       (392,859)(c)      2,392,857
                                                                    ----------------   ------------    ---------------

    Total liabilities                                                    10,879,737     (3,162,878)         7,716,859
                                                                    ----------------   ------------    ---------------

Commitments and contingencies

Stockholders' equity (deficit):
  Preferred stock, $0.0001 par value; 50,000,000 shares authorized,
    no shares issued and outstanding                                              -              -                  -
  Common stock, $0.0001 par value; 200,000,000 shares authorized;
    59,291,172 shares issued and outstanding                                  5,929              -              5,929
  Additional paid-in capital                                             72,005,284      5,037,544 (d)     77,042,828
  Accumulated deficit                                                   (79,146,217)    (1,891,273)(e)    (81,037,490)
                                                                    ----------------   ------------    ---------------
    Total stockholders' (deficit) equity                                 (7,135,004)     3,146,270         (3,988,734)
                                                                    ----------------   ------------    ---------------
Total liabilities and stockholders' equity (deficit)                $     3,744,733    $   (16,608)    $    3,728,125
                                                                    ================   ============    ===============

(a) -- Adjustment to eliminate prepaid debt issuance costs related to issuance of Convertible Notes Payable
(b) & (c)-- Adjustment to record discount related to issuance of "J" Units
(d)-- Adjustment to record discount related to issuance of "J" Units
(e)-- Adjustment to record net impact to 2007 and 2006 Statements of Operations
</TABLE>

                                       8
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
<TABLE>
<S>                                              <C>              <C>              <C>
1. Restatement (Continued)

                           RESTATED UNAUDITED STATEMENT OF OPERATIONS
------------------------------------------------------------------------------------------------

                                                    For the Three Months Ended March 31, 2008
                                                 -----------------------------------------------
                                                 As Previously
                                                    Reported      Adjustments       As Restated
                                                 -------------    ------------     -------------
Revenues:
  Products                                       $     28,219     $         -      $     28,219
  Services                                              4,165               -             4,165
                                                 -------------    ------------     -------------
     Total revenues                                    32,384               -            32,384

Cost of Revenues:
  Products                                                  -          44,419 (a)        44,419
                                                 -------------    ------------     -------------
    Gross profit                                       32,384         (44,419)          (12,035)
                                                 -------------    ------------     -------------

Operating Expenses:
  Sales and marketing                                 371,311         (44,419)          326,892
  Research and development                          2,601,123               -         2,601,123
  General and administrative                        1,101,883        (108,657)(b)       993,226
                                                 -------------    ------------     -------------
    Total operating expenses                        4,074,317        (153,076)        3,921,241
                                                 -------------    ------------     -------------
Loss from operations                               (4,041,933)        108,657        (3,933,276)
                                                 -------------    ------------     -------------

Other income (expense):
  Interest income                                      27,002               -            27,002
  Interest expense                                   (161,112)       (669,074)(c)      (830,186)
                                                 -------------    ------------     -------------
    Total other income (expense)                     (134,110)       (669,074)         (803,184)
                                                 -------------    ------------     -------------

    Net loss                                     $ (4,176,043)    $  (560,417)     $ (4,736,460)
                                                 =============    ============     =============
Basic and diluted net loss
  per common share                               $      (0.07)    $     (0.01)     $      (0.08)
                                                 =============    ============     =============
Shares used in computing basic and diluted
  net loss per share                               57,792,266      57,792,266        57,792,266
                                                 =============    ============     =============

(a)-- Adjustment to reclass warrant amortization costs related to sales to a major customer
(b)-- Adjustment to reverse amortization of Prepaid Debt Issuance Costs
(c)-- Adjustment to record increase of interest expense related to amortization of Discount on
      Convertible Notes Payable
</TABLE>

                                       9
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. Restatement (Continued)
<TABLE>
<S>                                                                             <C>                <C>               <C>
                                           RESTATED UNAUDITED STATEMENT OF CASH FLOWS
---------------------------------------------------------------------------------------------------------------------------------

                                                                                    For the Three Months Ended March 31, 2008
                                                                                -------------------------------------------------
                                                                                 As Previously
                                                                                    Reported        Adjustments      As Restated
                                                                                ----------------   -------------     ------------
Cash flows from operating activities:
  Net loss                                                                      $    (4,176,043)   $   (560,417)(a)  $(4,736,460)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                        93,848               -           93,848
    Amortization of warrant issued to customer                                           14,418               -           14,418
    Amortization of premium and discount on notes payable                               (79,918)        596,886 (b)      516,968
    Amortization of debt issuance costs                                                 108,658         (36,469)(c)       72,189
    Stock-based compensation expense                                                  1,149,019               -        1,149,019

  Changes in operating assets and liabilities:
    Accounts receivable                                                                 (31,961)              -          (31,961)
    Restricted cash                                                                      67,574                           67,574
    Prepaid expenses and other current assets                                            16,956               -           16,956
    Accounts payable and other accrued expenses                                         (21,893)              -          (21,893)
    Deferred revenues                                                                     8,181               -            8,181
                                                                                ----------------   -------------     ------------
        Net cash used in operating activities                                        (2,851,161)              -       (2,851,161)
                                                                                ----------------   -------------     ------------

Cash flows from investing activities:
    Purchases of property and other assets                                              (25,023)              -          (25,023)
                                                                                ----------------   -------------     ------------
        Net cash used in investing activities                                           (25,023)              -          (25,023)
                                                                                ----------------   -------------     ------------

Cash flows from financing activities:
    Proceeds from private placements - equity, net of cash commissions                  936,900               -          936,900
                                                                                ----------------   -------------     ------------
        Net cash provided by financing activities                                       936,900               -          936,900
                                                                                ----------------   -------------     ------------

Net decrease in cash and cash equivalents                                            (1,939,284)              -       (1,939,284)
Cash and cash equivalents at beginning of period                                      4,480,694               -        4,480,694
                                                                                ----------------   -------------     ------------
Cash and cash equivalents at end of period                                      $     2,541,410    $          -      $ 2,541,410
                                                                                ================   =============     ============

(a)-- Adjustment to record net impact to the Statement of Operations for the period ended March 31, 2008.
(b)-- Adjustment to record the amortization of Discount on Convertible Notes Payable
(c)-- Adjustment to record the reversal of amortization of Debt Issuance Costs
</TABLE>

                                       10
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

2.    Summary of Significant Accounting Policies

Basis of Presentation and Continuation as a Going Concern

The accompanying  unaudited  consolidated  financial statements are presented in
accordance with the requirements  for Form 10-Q and contemplate  continuation of
ANTs software inc. (the "Company"), as a going concern. However, the Company has
suffered  recurring losses from operations and has a net capital deficiency that
raises  substantial  doubt  about the  Company's  ability to continue as a going
concern.  The Company has had minimal revenues since inception,  incurred losses
from operations since its inception and has a net accumulated deficit during its
years of operations  totaling  $91,032,977,  as of March 31, 2009. The Company's
ability to continue as a going concern is dependent upon management's ability to
generate  profitable  operations  in the  future  and/or  obtain  the  necessary
financing to meet obligations and repay liabilities arising from normal business
operations  when they come due.  The Company  plans to seek  additional  capital
through  private  placements  of equity or debt. If the Company is successful in
its efforts to generate  revenue in 2009, it will be a source of operating funds
through the third quarter of 2009.  This  expectation  includes the  anticipated
receipt  of the final  payment of $2  million  from a  customer  as shown in the
Consolidated   Balance  Sheets.  The  Company  collected  $1.5  million  of  the
outstanding  balance  in May  2009.  Management's  plans,  if  successful,  will
mitigate the factors that raise  substantial doubt about the ability to continue
as a going concern.

The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with U.S. generally accepted  accounting  principles
("U.S.  GAAP") for interim  financial  information and with the  instructions to
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required  for  annual  financial  statements  and  therefore  should  be read in
conjunction  with the  Company's  Annual  Report on Form 10-K for the year ended
December 31, 2008. The December 31, 2008 consolidated  balance sheet was derived
from audited  financial  statements  filed with our 10-K as of December 31, 2008
and  therefore  may not include all  disclosures  required for annual  financial
statements.

There have been no significant changes in the Company's  significant  accounting
policies  during  the three  months  ended  March 31,  2009 as  compared  to the
significant accounting policies described in the Company's Annual Report on Form
10-K for the year ended December 31, 2008. The  information  furnished  reflects
all adjustments (all of which were of a normal recurring nature),  which, in the
opinion  of  management,  are  necessary  to  make  the  consolidated  financial
statements not misleading and to fairly present the financial position,  results
of operations,  and cash flows on a consistent basis.  Operating results for the
three  months  ended  March 31,  2009 and 2008  (restated)  are not  necessarily
indicative of the results that may be expected in the future.

Principles of Consolidation

The consolidated financial statements include the accounts of ANTs software inc.
and its wholly-owned subsidiary, Inventa Technologies, Inc. ("Inventa") from May
30, 2008, the date of acquisition  (collectively  referred to as the "Company").
All significant intercompany transactions and accounts have been eliminated.

Use of Estimates

The  preparation  of the  financial  statements  in  accordance  with U.S.  GAAP
requires  management to make  estimates  and  assumptions  that affect  reported
amounts of assets and  liabilities,  the  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those  estimates.  The  significant  estimates  made by management  include
allowance for doubtful  accounts  receivable,  recoverability  of long-lived and
intangible assets, the fair value of the warrants and debt issued in conjunction
with the issuance of the  promissory  notes,  and  assumptions  incorporated  in
determining stock-based compensation.

                                       11
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

2.    Summary of Significant Accounting Policies (Continued)

Income Taxes

Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets,  including tax loss and credit  carryforwards,  and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment  date.  Deferred  income tax expense  represents the change during the
period in the deferred tax assets and deferred tax  liabilities.  The components
of the  deferred  tax assets and  liabilities  are  individually  classified  as
current and non-current based on their characteristics.  Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management,  it is more
likely than not that some  portion or all of the deferred tax assets will not be
realized.

The income tax  benefits  generated in the three months ended March 31, 2009 and
2008  (restated)  as a result of the Company's net losses have been fully offset
by recording a valuation allowance in each period.

Revenue Recognition

The  Company  recognizes  license  and royalty  revenue in  accordance  with the
provisions of Statement of Position ("SOP") 97-2,  Software Revenue  Recognition
("SOP  97-2"),  and  SOP  98-9,  Modification  of  SOP  97-2,  Software  Revenue
Recognition,  With   Respect  to  Certain   Transactions.  Revenues  consist  of
product  revenues   representing   sales  of  customized   platforms  using  our
intellectual property, licenses and royalties and services revenues representing
managed and  professional  services fees for maintenance and support  services.
Maintenance  and support  revenue is deferred  and  recognized  over the related
contract period,  generally twelve months, beginning with customer acceptance of
the product.

The  Company  uses the  residual  method  to  recognize  revenue  when a license
agreement  includes one or more  elements to be  delivered at a future date.  If
there is an undelivered element under the license arrangement,  the Company will
defer revenue based on  vendor-specific  objective evidence ("VSOE") of the fair
value of the  undelivered  element,  as determined by the price charged when the
element  is sold  separately.  If the VSOE of fair  value does not exist for all
undelivered  elements,  the Company defers all revenue until sufficient evidence
exists or all elements have been delivered. Under the residual method, discounts
are allocated only to the delivered  elements in a multiple element  arrangement
with any  undelivered  elements  being  deferred based on VSOE of fair values of
such undelivered  elements.  Revenue from software license  arrangements,  which
comprise  prepaid  license and  maintenance and support fees, is recognized when
all of the following criteria are met:

     o    Persuasive evidence of an arrangement exists;
     o    Delivery has occurred and there are no future deliverables except PCS;
     o    The fee is fixed and determinable. If the Company cannot conclude that
          a fee is fixed and determinable, then assuming all other criteria have
          been met, revenue is recognized as payments become due in accordance
          with paragraph 29 of SOP 97-2; and
     o    Collection is probable.

                                       12
<PAGE>

                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

2.    Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation

The Company has two stock-based  employee and director  compensation  plans (the
ANTs  software inc. 2000 Stock Option Plan and the ANTs software inc. 2008 Stock
Plan).  Since January 1, 2006, the Company has been using the provisions of SFAS
123(R),  Share-Based Payment ("SFAS 123(R)"),  to account for stock-based awards
compensation  expense.  The  Company  elected  to use the  modified  prospective
transition  method as permitted by SFAS 123(R).  Under this  transition  method,
stock-based  compensation  expense for the year ended December 31, 2006 includes
compensation  expense for all stock-based  compensation awards granted prior to,
but not fully vested,  as of January 1, 2006, based on the grant date fair value
estimated in accordance with the original provisions of SFAS 123, Accounting for
Stock  Compensation  ("SFAS  123").  Stock-based  compensation  expense  for all
stock-based  compensation  awards granted subsequent to January 1, 2006 is based
on the grant date fair value estimated in accordance with the provisions of SFAS
123(R). The Company recognizes compensation expense for stock option awards on a
straight-line  basis over the requisite  service period of the award,  generally
three  years;   however,   the  Company  has  also  issued  stock  options  with
performance-based vesting criteria.

All stock-based  awards to nonemployees are accounted for at their fair value in
accordance with Emerging Issues Task Force ("EITF") 96-18, Accounting for Equity
Instruments  that are  Issued  to Other  than  Employees  for  Acquiring,  or in
Conjunction with Selling,  Goods or Services.  The Company has recorded the fair
value of each stock option issued to  non-employees as determined at the date of
grant using the Black-Scholes option pricing model.

Fair Value of Financial Instruments

On January 1, 2008,  the Company  adopted SFAS No. 157, Fair Value  Measurements
("SFAS 157"), for all financial  assets and liabilities and nonfinancial  assets
and liabilities  measured at fair value on a recurring  basis. In February 2008,
the FASB issued FASB Staff Position 157-2,  Effective Date of FASB Statement No.
157, which delayed the effective date of SFAS No. 157 for the Company to January
1, 2009 for  nonfinancial  assets and  liabilities  measured  at fair value on a
non-recurring  basis. The Company adopted these remaining  provisions on January
1, 2009. SFAS 157 defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles, and expands disclosures about
fair value  measurements.  This  statement  does not  require any new fair value
measurements,  but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information.

The Company's  carrying  amount  reported in the balance sheet for cash and cash
equivalents,  accounts receivable,  and accounts payable approximates fair value
due to the immediate or short-term maturity of these financial instruments.  The
carrying  values of the  convertible  promissory  notes  approximate  their fair
values.  To determine the fair value of the convertible  promissory  notes,  the
Company  estimated the fair value by first  determining the Company's  effective
borrowing  rate. The effective  borrowing rate was estimated by considering  the
Company's  high credit risk and high risk of  nonperformance.  The Company  then
evaluated the present value of the future cash flows for convertible  promissory
notes.


                                       13
<PAGE>
                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


3.    Basic and Diluted Net Loss per Share

Basic net loss per share is calculated in accordance with SFAS No. 128, Earnings
per Share, using the weighted-average number of common shares outstanding during
the period.  Diluted net loss per share is computed  using the  weighted-average
number of common and dilutive common  equivalent shares  outstanding  during the
period.

The following  unaudited table presents the calculation of basic and diluted net
loss per share for the three months  ending March 31, 2009 and 2008  (restated),
respectively.  At March 31,  2009 and  2008,  the  Company  had  10,351,957  and
7,770,611  antidilutive  shares  of  common  stock  related  to  stock  options,
respectively.  At March 31,  2009 and  2008,  the  Company  had  12,106,115  and
5,252,150  antidilutive shares related to convertible promissory notes. At March
31, 2009 and 2008,  warrants for the purchase of 4,557,941 and 7,970,005  shares
of common stock at prices  ranging from $0.60 to $2.31 per share,  respectively,
were  anti-dilutive.  These  anti-dilutive  instruments  are not included in the
calculation of basic and diluted net loss per share.

                                              Loss           Shares     Loss per
                                           (Numerator)   (Denominator)   Share
                                         --------------- -------------  --------
 Quarter ended March 31, 2009
   Basic and diluted net loss per share  $   (3,103,363)    90,648,369  $ (0.03)
 Quarter ended March 31, 2008 (restated)
   Basic and diluted net loss per share  $   (4,736,460)    57,792,266  $ (0.08)

4.    Accounts Payable and Other Accrued Expenses

At March 31, 2009 and  December  31, 2008,  accounts  payable and other  accrued
expenses consisted of the following:

                                                   March 31,    December 31,
                                                      2009          2008
                                                  ------------  ------------
                                                  (unaudited)
Trade payables and other                          $  1,458,171  $    900,176
Accrued bonuses and commissions payable                 51,029       180,111
Accrued vacation payable                               130,443        77,175
Accrued interest on convertible promissory notes       281,519       287,581
                                                  ------------  ------------
   Total                                          $  1,921,162  $  1,445,043
                                                  ============  ============

5.    Deferred Revenue

Deferred revenue is comprised of license fees and annual maintenance and support
fees.  License fees are  recognized  upon  customer  acceptance  of the product.
Annual  maintenance  and support fees are amortized  ratably into revenue on the
statements  of operations  over the life of the  contract,  which is generally a
12-month period beginning with customer acceptance of the product.

Deferred revenue activity was as follows:
<TABLE>
<S>                                                     <C>       <C>              <C>          <C>
                                                         Three Months Ended           Three Months Ended
                                                           March 31, 2009               March 31, 2008
                                                     --------------------------    --------------------------
                                                            (unaudited)                    (unaudited)
Beginning of the period                                            $   487,121                   $    48,818
Invoiced current period                                                524,367                        40,565
   Deferred revenue recognized from prior periods       (386,564)                     (28,219)
   Invoiced and recognized current period               (224,394)                      (4,165)
                                                     ------------                  -----------
Total revenue recognized current period                               (610,958)                      (32,384)
                                                                   ------------                  ------------
End of the period                                                  $   400,530                   $    56,999
                                                                   ============                  ============
</TABLE>

                                       14
<PAGE>
                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

6.    Debt

As of March 31, 2009,  the  outstanding  balance of the  Convertible  Promissory
Notes  was  $3,664,356.  This  is  comprised  of  notes  with a face  amount  of
$11,453,226 less unamortized debt discount of $7,788,870.

Debt  discount  and  other  issuance  costs   associated  with  the  Convertible
Promissory  Notes are amortized to interest  expense over the remaining  life of
the  Convertible  Promissory  Notes using the effective  interest  method or the
straight-line  method,  whichever is applicable.  Upon conversion of Convertible
Promissory  Notes into Common  Stock,  unamortized  costs  relating to the notes
converted  are charged to interest  expense.  Total charges to interest for debt
discount and other issuance costs were $781,133 and $589,157  (restated) for the
three months ended March 31, 2009 and 2008, respectively.

During the three  months  ended March 31,  2009,  Convertible  Promissory  Notes
totaling $50,000 were repaid by the Company.

During  the three  months  ended  March  31,  2009,  the due date of a  $200,000
Convertible  Promissory  Note was extended from March 20, 2009 to the earlier of
August 20, 2009 or the receipt of  $2,000,000  in  financing.  The Company  also
agreed to issue 5,000  shares of the  Company's  common  stock for each month or
fraction thereof during which the note is outstanding, with no other terms being
modified.  This extension was not considered a modification  in accordance  with
EITF 96-19, Debtors Accounting for Modification or Exchange of Debt Instruments.
The holder of the note also agreed to accept  shares of the  Company's  stock in
consideration for interest payments.

7.    Commitments and Contingencies

Effective  January 6, 2009, the Company took possession of the additional  space
at the facilities located in Mt. Laurel, New Jersey. Accordingly, rent increased
from $10,007 per month to $16,299 per month or approximately  $196,000 per year.
The amendment  also  restates the end of the lease  commitment to be seven years
from the date of the  Certificate  of Occupancy  for the  additional  space,  or
January 6, 2016. At expiration of the amended lease,  the Company has the option
to renew the terms of the lease for an  additional  five years at the greater of
$18,467 or an increase in the consumer price index.

On July 10, 2008, Sybase, Inc.  ("Sybase"),  an enterprise software and services
company,  filed a  complaint  for  common  law unfair  business  practices,  and
tortuous  interference  with contractual  relations,  among other things, in the
Superior Court of the State of California,  County of Alameda. Sybase is seeking
an injunction,  and damages, among other legal and equitable relief. The Company
believes that this lawsuit is without  merit and intends to continue  vigorously
defending itself.

On August 22,  2008, a former  Company  employee  filed a putative  class action
complaint  for all current  and former  software  engineers,  for failure to pay
overtime  wages,  and failure to provide meal  breaks,  among other  things,  in
Superior  Court of the State of  California,  County of San  Mateo.  The  former
employee is seeking an injunction,  damages, attorneys' fees, and penalties. The
Company  believes  that this  lawsuit is without  merit and  intends to continue
vigorously defending itself.

On October 14, 2008, Bayside Plaza ("Bayside"), a partnership, filed a complaint
for breach of contract in Superior Court of the State of  California,  County of
San  Mateo.  Bayside  is seeking  approximately  $50,000 in rent,  late fees and
operating  expenses per month from October 2008. The Company intends to continue
defending itself.

Beginning in July 2008,  the Company  leases an executive  apartment  owned by a
stockholder  who owns 500,000 shares of the Company's  common stock and who also
holds a Convertible  Promissory  Note totaling  $1,000,000  (undiscounted),  for
$2,900 per month or $34,800 per annum.  This lease  expires in June 2009 and has
not been renewed.


                                       15
<PAGE>
                               ANTS SOFTWARE INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

8.    Stockholders' Equity

Following is a summary of equity  transactions  by for the three  months  ending
March 2009 and 2008, respectively.

Three months ended March 31, 2009:

During the three months ended March 31, 2009,  the Company  granted 35,000 stock
options at $0.35 per share.

For the three  months ended March 31,  2009,  the Company  recognized a total of
$240,869  in  compensation  expense  related to the  vesting of  employee  stock
options and $13,751 in professional  fees related to the vesting of non-employee
stock options.

Three months ended March 31, 2008:

Funds raised through private offerings to accredited investors:

In the first quarter of 2008, the Company received $936,900,  net of commissions
of $104,100 from accredited  investors,  for the sale of 1,735,000 shares of the
Company's  common  stock,  at a price of $0.60 per  share.  The  Company  paid a
placement  agent a cash  commission  of $104,100  and issued  157,727  shares of
common stock to the placement  agent in connection with these  investments.  The
shares are contractually valued at $0.66 per share or $104,100.

Other equity transactions:

On March 26 and March 31,  2008,  the Board of Directors  approved  repricing of
certain stock options and warrants for employees,  consultants and Board members
to the  then-current  market price of the Company's  common stock.  Officers and
Board members forfeited  1,193,667 vested and unvested shares in connection with
the repricing.  The Company recognized  $786,545 in stock compensation  expense,
net of forfeiture credits, as a result of the repricing.

For the three  months ended March 31,  2008,  the Company  recognized a total of
$1,120,985  in  compensation  expense  related to the vesting of employee  stock
options  and the  repricing  and  $28,034 in  professional  fees  related to the
vesting of non-employee stock options and warrants.

As of March 31,  2009,  the  Company had  outstanding  options to purchase up to
10,351,957 shares of common stock at exercise prices ranging from $0.35 to $3.20
per share, of which 6,815,873 were exercisable.

During the three months ended March 31, 2009,  the Company  granted 35,000 stock
options  at $0.35 per share  with a fair value of $0.24 per share on the date of
grant. The fair value was estimated using the Black-Scholes valuation model with
the following weighted-average assumptions:

   Expected life in years                        3.00
   Average volatility                          105.28%
   Risk free rate                                1.27%
   Dividend yield                                0.00%

As of March 31, 2009, the Company had 4,557,941 warrants outstanding to purchase
common stock at exercise  prices ranging from $0.60 to $2.31 per share, of which
4,557,941 were exercisable.

9.   Concentrations

At March 31, 2009 and December 31, 2008, two customers  accounted for 84% of the
trade  accounts  receivable  balance of $365,931  and 73% of the trade  accounts
receivable balance of $383,445, respectively.

For the quarter ended March 31, 2009, three customers accounted for 97% of total
revenues of $1,388,357.


                                       16
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following  information should be read in conjunction with the financial
statements  and notes thereto in Part 1 Item 1,  Financial  Statements  for this
Quarterly  Report  on Form  10-Q and with Item 7,  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations,  in our Annual Report
on Form 10-K for the year ended December 31, 2008.

     Certain statements  contained in this Form 10-Q constitute  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties.  Such forward-looking  statements are based
on  assumptions  that we will  have  adequate  financial  resources  to fund the
development  and  operation  of our  business,  that there  will be no  material
adverse  change in our  operations  or  business,  that we will meet  success in
marketing  and  selling  our  products,  and that we will be able to continue to
attract and retain  skilled  employees  necessary for our business,  among other
things. The foregoing  assumptions are based on judgments with respect to, among
other things,  information  available to our future  economic,  competitive  and
market  conditions and future business  decisions.  All of these assumptions are
difficult or impossible to predict  accurately  and many are beyond our control.
Accordingly,   although  we  believe  that  the   assumptions   underlying   the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in the forward-looking  statements will be realized. There are a number of risks
presented  by our  business  and  operations,  which could  cause our  financial
performance to vary markedly from prior results, or results  contemplated by the
forward-looking  statements.  Such risks  include  failure of our  technology or
products to work as anticipated, failure to develop commercially viable products
or services from our technology,  delays or failure in financing efforts, delays
in or lack of market  acceptance,  failure to recruit  adequate  personnel,  and
problems  with  protection of  intellectual  property,  among others.  The words
"believe,"  "estimate,"  "expect,"  "intend,"  "anticipate"  "should",  "could",
"may",  "plan" and similar  expressions and variations  thereof identify some of
these forward-looking statements. Management decisions, including budgeting, are
subjective  in many  respects  and  periodic  revisions  must be made to reflect
actual conditions and business developments, the impact of which may cause us to
alter our capital  investment and other  expenditures,  which may also adversely
affect our results of operations. In light of significant uncertainties inherent
in forward-looking  information  included in this Quarterly Report on Form 10-Q,
the inclusion of such information  should not be regarded as a representation by
us that our objectives or plans will be achieved.  We undertake no obligation to
revise or publicly release the results of any revision to these  forward-looking
statements.

Restatement

The Company has restated its financial statements for the period ended March 31,
2008 to correct errors in such financial statements.

The restatement of the Company's financial  statements is based upon a review of
the  accounting  treatment of certain  transactions  entered into by the Company
with  certain  investors  in 2006 and 2007.  During  this  review,  the  Company
discovered that it had incorrectly applied a restriction  discount to the market
value of its common stock based on a long history of selling  restricted  common
stock to a group of investors.  The discounted  stock price was then used in the
allocation  of  proceeds  between  debt and  equity  for  units  of  convertible
promissory  notes and  restricted  common  shares that were sold to investors in
late 2006 and early 2007. The discounted  stock price was also used to determine
if there was a  beneficial  conversion  related  to the  convertible  promissory
notes.  The same  methodology  was used in late  2007  when the  Company  issued
convertible promissory notes along with common stock warrants. See Note 1 of the
Consolidated Financial Statements for the impact of the restatement.

                                       17
<PAGE>

Results of Operations

Our consolidated results of operations for the three months ended March 31, 2009
and 2008 (restated) are summarized below:

                                      Three Months Ending March 31,
                                      -----------------------------
                                                          2008
                                          2009         (restated)     % Change
                                      -------------   ------------   -----------


Revenues                              $  1,388,357    $    32,384          4187%
Cost of revenues                         1,225,770         44,419          2660%
                                      -------------   ------------   -----------
   Gross profit                            162,587        (12,035)         1451%
Operating expenses                       2,197,891      3,921,241           -44%
                                      -------------   ------------   -----------
   Loss from operations                 (2,035,304)    (3,933,276)           49%

Other income (expense), net             (1,068,059)      (803,184)          -33%
                                      -------------   ------------   -----------
   Net loss                             (3,103,363)    (4,736,460)           34%
                                      =============   ============   ===========
Net loss per share -
   basic and diluted                  $      (0.03)   $     (0.08)            -
                                      =============   ============   ===========
Shares used in computing basic and
   diluted net loss per share           90,648,369     57,792,266            57%
                                      =============   ============   ===========

Revenues

Revenues for the three months ended March 31, 2009 consist of services  revenues
representing managed and professional  services fees for maintenance and support
services. Future revenues are expected to include sales and licenses of our ANTs
Compatibility  Server ("ACS") product and related  technology,  managed services
revenue related to existing and new contracts and professional  services revenue
from  pre  and  post-sales   consulting   related  to  ACS  and  other  database
consolidation technologies we may develop.

Revenues  for the three  months  ended  March 31, 2008 are from ANTs Data Server
("ADS")  license fees,  recognition of deferred  maintenance and support of ADS,
royalties from third parties that resell ADS, and professional  services fees on
ADS installations.

During the three months ended March 31, 2009, we recognized  approximately  $1.4
million in revenue,  an increase of approximately  $1.4 million versus the three
months ended March 31, 2008.  The increase was primarily due to the  acquisition
of  Inventa as all  revenues  during the first  quarter  are  related to Inventa
services  revenues.  For the  quarter  ended  March 31,  2009,  three  customers
accounted for 97% of total revenues of $1,388,357.

Cost of Revenues

Cost of  revenues  during the three  months  ending  March 31, 2009 and 2008 was
approximately $1.2 million and $44,000,  respectively.  Cost of revenues for the
quarter ended March 31, 2009 consists of personnel  costs to provide managed and
professional services.  Cost of revenues during the quarter ended March 31, 2008
consisted primarily of amortization of a warrant from a major customer.

                                       18
<PAGE>
Operating Expenses

Operating  expenses by department for the three months ending March 31, 2009 and
2008 were as follows:
<TABLE>
<S>                         <C>               <C>          <C>  <C>               <C>
                                           Three Months Ended March 31,
                            ----------------------------------------------------------
                                                                         2008
                                          2009                        (restated)
                            ----------------------------------  ----------------------
                                 $           %      % Change        $           %
                            -----------  ---------  ----------  ----------  ----------

Sales and marketing         $   517,305        24%         58%  $  326,892          9%
Research and development        535,957        24%        -79%   2,601,123         66%
General and administrative    1,144,629        52%         15%     993,226         25%
                            -----------  ---------  ----------  ----------  ----------
Total operating expenses    $ 2,197,891       100%        -44%  $3,921,241        100%
                            ===========  =========  ==========  ==========  ==========
</TABLE>

Our primary  expenses  are  salaries,  benefits and  consulting  fees related to
developing and marketing  ACS,  marketing and selling  managed and  professional
services and, for the quarter ended March 31, 2008,  maintenance  and support of
ADS. We completed development of ADS in 2005 and began sales and support of that
product during that year. We began development of ACS in early 2007.

Sales and Marketing

Sales  and  marketing  expense  consists  primarily  of  employee  salaries  and
benefits,  stock-based  compensation,  professional fees for marketing and sales
services, travel and entertainment and corporate overhead allocations.

Sales and  marketing  expense for the three months ended March 31, 2009 and 2008
is presented in the table below.
<TABLE>
<S>                                        <C>            <C>                     <C>
                                           Three Months Ended March 31,        %
                                           ----------------------------
                                               2009           2008           Change
                                           ------------   -------------    ----------
Employee compensation and benefits              348,018         148,800          134%
Stock-based compensation                         32,201          64,936          -50%
Consulting fees                                  26,678          58,737          -55%
Travel and entertainment                         18,206          36,337          -50%
Corporate allocations from general and
   administrative expenses                       31,532          17,663           79%
Events and promotions and other                  12,420             419        2,864%
Amortization of customer relationships           48,250               -          N/A
                                           ------------   -------------    ----------
Total                                      $    517,305   $     326,892           58%
                                           ------------   -------------    ----------

Headcount at end of period                            6               2          200%
</TABLE>

Total sales and marketing  expense  increased by approximately  $190,000,  a 58%
increase, due primarily to the following:

     o    Employee  compensation and benefits increased by 134% primarily due to
          the acquisition of Inventa and the resulting increase in head-count.

     o    Stock-based  compensation  decreased  50%  primarily due to a one-time
          non-cash charge incurred for the repricing of stock options, effective
          March 26, 2008, to the then-current market price of our common stock.

     o    Consulting  fees  decreased  55%  due  to  efficiencies   achieved  in
          go-to-market strategy. By selling through partners rather than selling
          directly  to   end-users,   we  eliminated   end-user   marketing  and
          lead-generation programs.

     o    Travel  and  entertainment   decreased  50%  as  we  decreased  travel
          activities for our sales and marketing staff.

     o    Corporate  allocations  increased  79% due to  increased  headcount in
          sales and marketing.

     o    Amortization of customer  relationships  resulted from the acquisition
          of Inventa in the prior year.

                                       19
<PAGE>
Research and Development

Research and development expense consists primarily of employee compensation and
benefits,  contractor  fees  to  research  and  development  service  providers,
stock-based  compensation  and equipment and computer  supplies.  During 2007 we
began developing ACS, which  significantly  increased our contract  research and
development expense.

Research and  development  expense for the three months ended March 31, 2009 and
2008 is presented in the table below.
<TABLE>
<S>                                          <C>            <C>                     <C>
                                             Three Months Ended March 31,
                                             ----------------------------       %
                                                 2009            2008         Change
                                             -----------    -------------   -----------
Employee compensation and benefits           $   147,823    $   1,110,838          -87%
Contractor fees                                  220,264          659,745          -67%
Stock-based compensation                          28,532          544,940          -95%
Corporate allocations from general and
  administrative expenses                         31,532          190,754          -83%
Equipment and computer supplies                   44,325           85,312          -48%
Other                                             63,481            9,534          566%
                                             -----------    -------------   -----------
Total                                        $   535,957    $   2,601,123          -79%
                                             -----------    -------------   -----------

Headcount at end of period                             4               26          -85%
</TABLE>

Total research and development expenses decreased by approximately $2.1 million,
a 79% decrease, due primarily to the following:

     o    Employee  compensation  and  benefits,  and  stock-based  compensation
          decreased  87% due to decreases  in headcount  from 26 as of March 31,
          2008 to 4 as of March 31, 2009.
     o    Contractor fees decreased 67% as we decreased use of contract research
          and  development  services  on the ACS  product  and  eliminated  such
          services for the ADS product.
     o    Corporate  allocations  decreased  83% due to  decreased  headcount in
          research and development.
     o    Equipment and computer supplies decreased primarily due to the reduced
          need for such equipment as a result of the reduction in headcount.

General and Administrative

General and administrative  expenses consists primarily of employee salaries and
benefits,   professional  fees  (legal,  accounting,  and  investor  relations),
facilities expenses, and corporate insurance.

General and  administrative  expenses  for the three months ended March 31, 2009
and 2008 is presented in the table below.
<TABLE>
<S>                                                 <C>            <C>                    <C>
                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                                       2008
                                                           2009     (restated)     % Change
                                                    ------------   --------------------------
Employee compensation and benefits                  $   272,288    $    238,917           14%
Stock-based compensation                                152,341         539,143          -72%
Facilities, director fees, insurance and other          334,053         273,725           22%
Professional fees                                       415,317         149,858          177%
Travel and entertainment                                 33,699               -          N/A
Corporate allocations to Sales and marketing and
   research and development                             (63,069)       (208,417)          70%
                                                    ------------   -------------  -----------
Total                                               $ 1,144,629    $    993,226           15%
                                                    ------------   -------------  -----------

Headcount at end of period                                    4               3           33%
</TABLE>

                                       20
<PAGE>
Total general and administrative expenses increased by approximately $151,000, a
15% increase, due primarily to the following:

     o    Employee compensation and benefits expense increased 14% due primarily
          to the acquisition of Inventa.
     o    Stock-based  compensation decreased 72% due primarily to the impact of
          the  repricing  of the exercise  price of certain  vested and unvested
          stock  options and  warrants to the  then-current  market value of our
          common stock as of March 26 and March 31, 2008.
     o    Professional fees increased 177% primarily due to expenses relating to
          the restatement of the 2008 financial statements.
     o    Allocations  of overhead  costs  decreased  70% versus the prior year.
          Allocations  of corporate  overhead  from  general and  administrative
          costs to the other  functional  departments  were based on  headcount.
          These  allocations  decreased  as the  number  of  personnel  in other
          functional departments decreased.

Other Income (Expense), Net

The components of other (expense)  income,  net for the three months ended March
31, 2009 and 2008, was as follows:

<TABLE>
<S>                                             <C>           <C>                       <C>
                                                Three Months Ended March 31,
                                                ----------------------------
                                                                   2008
                                                    2009        (restated)     % Change
                                                ------------  -------------- --------------
Other income (expense):
  Interest expense, convertible notes payable   $(1,072,487)  $    (830,186)            29%
  Interest income                                     2,483          27,002            -91%
  Other                                               1,945               -            N/A
                                                ------------  -------------- --------------
        Other income (expense), net             $(1,068,059)  $    (803,184)            33%
                                                ------------  -------------- --------------
</TABLE>

Other  income  (expense),   net  primarily   consists  of  interest  expense  on
convertible  notes payable and income earned on cash and cash  equivalents.  The
following items significantly impacted other (expense) income:

     o    Interest expense  increased  approximately  $242,000,  or 29%, for the
          three  months  ended March 31,  2009 as  compared to the three  months
          ended March 31, 2008 due to increased  amortization of the discount on
          the convertible notes payable.
     o    Interest income  decreased by  approximately  $25,000,  or 91%, due to
          lower invested cash balances and interest rates.

Liquidity, Capital Resources and Financial Condition

Cash flows as of and for the three months ended March 31, 2009 and 2008,  are as
follows:

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                                       2008
                                                        2009        (Restated)
                                                    ----------------------------
Net cash used in operating activities               $ (1,336,445) $  (2,851,161)
Net cash used in investing activities                    (23,059)       (25,023)
Net cash (used in) provided by financing activities      (50,000)       936,900
                                                    ------------- --------------
Net decrease in cash and cash equivalents           $ (1,409,504) $  (1,939,284)
                                                    ============= ==============

Since inception,  we have funded  operations and investments in operating assets
with cash raised through  financing  activities in the form of private offerings
to  accredited  investors.  The funds raised have been  primarily in the form of
sales of our common  stock and,  to a lesser  degree,  through  the  issuance of
convertible promissory notes.

                                       21
<PAGE>
Details regarding the cash flows by activity follow.

Cash Used in Operating Activities

During the three months ended March 31, 2009, cash used in operating  activities
totaled $1.3 million,  an increase of $1.5 million  compared to the three months
ended March 31, 2008. The following items  significantly  impacted our cash used
in operating  activities  in the first quarter of 2009 versus the same period of
2008:

     o    A decrease  in overall  salaries  and  benefits  due to a decrease  in
          headcount  from 31 at March 31, 2008 to 14 at March 31, 2009,  as well
          as a decrease in contract research and development fees.
     o    An increase in accounts payable and other accrued expenses

Cash Used in Investing Activities

During the three months ended March 31, 2009, cash used in investing  activities
totaled approximately  $23,000, a slight decrease of approximately $2,000 versus
the same period in 2008,  due to a decrease in the  purchase of computer and lab
equipment required to design and test our products.

Cash (Used in) Provided by Financing Activities

During the three months ended March 31, 2009, cash used by financing  activities
totaled   approximately  $50,000  from  the  payment  to  retire  a  convertible
promissory note.

During the three  months  ended  March 31,  2008,  cash  provided  by  financing
activities totaled approximately $937,000 from the following:

     o    We raised  $936,900,  net of commissions of $104,100 from the sale for
          the sale of 1,735,000 shares of the Company's common stock, at a price
          of $0.60 per share.
     o    Cash provided by financing  activities was reduced by cash commissions
          paid to a placement agent totaling $104,100.

Capital Resources and Going Concern

We anticipate  that current cash  resources will be sufficient for us to execute
our business plan into the third quarter of 2009. This expectation  includes the
anticipated  receipt of the final payment of $2 million from a customer as shown
in the Consolidated Balance Sheets. If further financing is not obtained we will
not be able to continue to operate as a going concern. We collected $1.5 million
of the  outstanding  balance in May 2009.  We believe that  securing  additional
sources  of   financing   to  enable  us  to  continue   the   development   and
commercialization of our proprietary technologies will be difficult and there is
no  assurance  of our  ability  to secure  such  financing.  A failure to obtain
additional  financing could prevent us from making  expenditures that are needed
to pay current  obligations,  allow us to hire additional personnel and continue
development of our product and technology.  If we raise additional  financing by
selling equity or convertible debt securities,  the relative equity ownership of
our existing  investors could be diluted or the new investors could obtain terms
more favorable than previous  investors.  If we raise  additional  funds through
debt  financing,  we could incur  significant  borrowing costs and be subject to
adverse consequences in the event of a default.

                                       22
<PAGE>
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

Our exposure to market risk for changes in interest  rates relates  primarily to
the  increase  or  decrease  in the  amount  of  interest  income we earn on our
investment  portfolio.  Our investment  portfolio consists of liquid investments
that  have  maturities  of three  months  or  less.  Our  risk  associated  with
fluctuating interest income is limited to investments in interest rate sensitive
financial  instruments.  Under our current  policy,  we do not use interest rate
derivative instruments to manage this exposure to interest rate changes. We seek
to ensure the safety and  preservation  of our  invested  principal  by limiting
default risk,  market risk, and  reinvestment  risk. We mitigate default risk by
investing in short-term investment grade securities.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer, evaluated
the  effectiveness  of our disclosure  controls and procedures  pursuant to Rule
13a-15  under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act").  In designing and  evaluating  the  disclosure  controls and  procedures,
management  recognizes  that any  controls  and  procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control objectives.

Based on management's evaluation, our Chief Executive Officer concluded that, as
of March 31, 2009,  our  disclosure  controls and  procedures  are designed at a
reasonable  assurance  level and are effective to provide  reasonable  assurance
that  information  we are required to disclose in reports that we file or submit
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified in  Securities  and  Exchange  Commission  rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to our
management,  including  our Chief  Executive  Officer to allow timely  decisions
regarding required disclosure.

(b) Changes in internal control over financial reporting.

We regularly review our system of internal control over financial  reporting and
make  changes to our  processes  and systems to improve  controls  and  increase
efficiency,  while  ensuring  that we maintain  an  effective  internal  control
environment.  Changes may include such  activities  as  implementing  new,  more
efficient systems, consolidating activities, migrating processes, or acquisition
of  subsidiaries.  As a result of the  material  weaknesses  listed in the 10-K,
management  has  continued  using  the  services  of the third  party  contract
consulting company.  Management is also in the process of analyzing all existing
controls  to  ensure  all  major,  non-routine  transactions  are  appropriately
recorded.

                                       23
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On July 10, 2008, Sybase, Inc.  ("Sybase"),  an enterprise software and services
company,  filed a  complaint  for  common  law unfair  business  practices,  and
tortuous  interference  with contractual  relations,  among other things, in the
Superior Court of the State of California,  County of Alameda. Sybase is seeking
an injunction,  and damages,  among other legal and equitable relief. We believe
that this lawsuit is without merit and intend to continue  vigorously  defending
ourselves.

On August  22,  2008,  a former  ANTs  employee  filed a putative  class  action
complaint  for all current  and former  software  engineers,  for failure to pay
overtime  wages,  and failure to provide meal  breaks,  among other  things,  in
Superior  Court of the State of  California,  County of San  Mateo.  The  former
employee is seeking an injunction,  damages,  attorneys' fees, and penalties. We
believe  that this  lawsuit is without  merit and intend to continue  vigorously
defending ourselves.

On October 14, 2008, Bayside Plaza ("Bayside"), a partnership, filed a complaint
for breach of contract in Superior Court of the State of  California,  County of
San  Mateo.  Bayside  is seeking  approximately  $50,000 in rent,  late fees and
operating  expenses per month from October 2008. The Company intends to continue
defending itself.

ITEM 1A.   RISK FACTORS

Other than the following  there has been no material  changes during the quarter
ended March 31, 2009.

We might not collect our receivables

Due to the ongoing  worldwide  economic crisis,  weakness in the credit markets,
significant  liquidity  problems in the financial  services industry and related
factors, we might face increased problems in collecting our accounts, notes, and
other obligations receivable.  Since we rely on those receivables to finance our
ongoing business operations,  failure to collect our receivables might cause our
business and operations to be severely and materially adversely affected.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

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

No matter was submitted to a vote of security  holders during the period covered
by this report.

ITEM 5.  OTHER INFORMATION

None

                                       24
<PAGE>
ITEM 6.  EXHIBITS

(a) Exhibits

         31.1     Certification of the Chief Executive Officer required by Rule
                  13a-14(a) of the Securities Exchange Act of 1934, as amended,
                  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                  of 2002
         31.2     Certification of the Principal Financial Officer required by
                  Rule 13a-14(a) of the Securities Exchange Act of 1934, as
                  amended, as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002
         32.1     Certification of the 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 Principal Financial Officer pursuant to
                  18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002


                                       25
<PAGE>
                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                             ANTs software inc.

Date: May 19, 2009          By: /s/ Joe Kozak
                                -----------------------------------------------
                                Joe Kozak, Chief Executive Officer and President



                                       26