Index


UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 
 
 (Mark One)
 xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
  or
   ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from  to .
 
 Commission File Number 000-51661
  BIGSTRING CORPORATION
 (Exact name of registrant as specified in its charter)
  Delaware

20-0297832(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)
 
 157 Broad Street, Suite 109, Red Bank, New Jersey 07701(Address of principal executive offices) (Zip Code)
 
 (732) 741-2840(Registrant's telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 None
 
 Securities registered pursuant to Section 12(g) of the Act:
 Common Stock, par value $0.0001
 (Title of class)
 
 Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes  ̈No x
  Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ̈No x
  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 xNo  ̈
  Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the Registrant was required to submit and post such files).  Yes xNo  ̈
  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ̈
  Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 Large accelerated filer  ̈Accelerated filer  ̈Non-accelerated filer  ̈Smaller reporting company x
  Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ̈No x
  At June 30, 2010, the aggregate market value of shares held by non-affiliates of the Registrant (based upon the closing sale price of such shares on The NASDAQ OTC Bulletin Board on June 30, 2010 was $2,183,703.
  At April 14, 2011, there were 137,027,690 shares of the Registrant’s common stock outstanding.
 
 Index
  SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 Certain information included in this Annual Report on Form 10-K and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property and the effects of governmental regulation.
  In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Annual Report on Form 10-K.
   Index
   BIGSTRING CORPORATION
 
 INDEX TO FORM 10-K
  PART I
PAGEItem 1.
Business
2Item 1A.
Risk Factors
6Item 1B.
Unresolved Staff Comments
6Item 2.
Properties
6Item 3.
Legal Proceedings
6Item 4.
(Removed and Reserved)
6PART IIItem 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
7Item 6.
Selected Financial Data
9Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
9Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
13Item 8.
Financial Statements and Supplementary Data
13Item 9.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
13Item 9A.
Controls and Procedures
13Item 9B.
Other Information
14PART IIIItem 10.
Directors, Executive Officers and Corporate Governance
15Item 11.
Executive Compensation
17Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
21Item 13.
Certain Relationships and Related Transactions and Director Independence
23Item 14.
Principal Accountant Fees and Services
23Item 15.
Exhibits, Financial Statement Schedules
25Index to Consolidated Financial Statements
F-1Index of Exhibits
E-1Signatures
25
 1
 Index
 
 PART I
  Item1.  Business
  Background
 BigString Corporation (“BigString” or the “Company”) was incorporated in the state of Delaware on October 8, 2003 under the name “Recall Mail Corporation.” The Company’s name was formally changed to “BigString Corporation” in July 2005. BigString was formed to develop technology that would allow the user of email services to have comprehensive control, security and privacy relating to the email generated by the user. In March 2004, the BigString email service was introduced to the market.
  BigString Interactive, Inc. (“BigString Interactive”), incorporated in the state of New Jersey, was formed by BigString in early 2006 to develop technology relating to interactive web portals.
  PeopleString Corporation (“PeopleString”), incorporated in the state of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. PeopleString is a separate reporting company under the Exchange Act.  As of April 14, 2011, BigString owned less than 16% of PeopleString’s outstanding common stock.
  BigString Interactive is currently BigString’s only operating subsidiary.
  Business Strategy
 The email industry has migrated from an advertising model to a blended model that includes advertising, subscriptions and hosting. Email service providers offer premium services and products which include, among other features, value-added services such as advanced spam filters, advanced virus protection, additional storage, multiple email addresses and secure email. In addition to our free email service product, which includes the aforementioned features plus our proprietary features, we offer premium email services, products and applications, which are offered in several different packages at various prices and may be purchased by the users of our BigString email service.
  BigString includes advertising with its email services. Advertisements are primarily displayed to users of our free service. Advertisements customarily include text and banner ads and are paid based on a mix of impressions, clicks and actions. BigString currently has agreements with a number of firms that provide advertising services. In the future, we may add additional types of advertisements and additional advertising service firms, as well as direct advertisers and sponsors, as we increase the monetization of our user base.
  Certain Internet service providers (“ISPs”), portals, social networks and content providers use email as a tool to compete against each other. This strategy incorporates email as part of their offering because email is one of the most effective web applications in bringing users back to a site, multiple times a day, day after day. We developed email hosting, private label, and co-branded solutions to leverage the ‘stickiness’ of email and the advantage it can offer an Internet property. These solutions offer BigString’s unique email features under the logos and marks of web publishers and content sites, such as search engines, social networks, online dating sites, ISPs and social media portals. Web publishers and content sites can further their image and differentiate their services from competitors, while increasing incremental traffic, page views and ad revenue from their existing members. Agreements may include a revenue share arrangement, and we may also charge development and maintenance fees. Web publishers and content sites provide the marketing, which expands awareness of BigString’s unique services beyond BigString’s marketing and can help us grow more quickly.
  Building on the vast popularity of the social networking sites such as Facebook®, Twitter®, MySpace®, Friendster® and LinkedIn®, BigString’s social networking applications allow users to easily send and receive messages, notifications, email and videos that self-destruct on command. These rapidly growing, adjacent markets offer BigString the opportunity to leverage its skills in messaging and streaming audio and video to create complementary messaging applications. Our development efforts are focused to address security and privacy gaps in social networking messaging applications.
  In December 2009, we received a patent from the United States Patent and Trademark Office for Universal, Recallable, Erasable, Secure and Timed Delivery Email. The issued patent may help us explore new licensing and revenue opportunities for our patented technology, as well as pursue any possible infringement.
  Promotion
 We promote our messaging service and products through the Internet, including messaging and email tag lines, organic search, paid search, banners, blogs, social networks, video and other viral tactics, multimedia, print, and radio, as well as through alliances with marketing affiliates and programs contained on our interactive entertainment portal. We also offer fee based services, such as our self-destructible SMS text application, through online stores as a point of sale license purchase.
   2
 Index
  Our promotions also include email hosting, private label, and co-branded solutions. The web publishers and content sites may offer our messaging services to their existing registered member base as well as all future members that register. The web publishers and content sites are responsible for marketing. BigString receives advertising revenue associated with these marketing affiliations and may also receive premium fees when registered members upgrade service. In conjunction with contracts to provide email services to marketing affiliates, BigString may be obligated to make payments, which may represent a portion of revenue, to its marketing affiliates.
  Market Affiliations
 We enter into market affiliations with other Internet companies regarding advertisements and other marketing promotions which can be accessed through our website. Through these marketing affiliations, advertisements, such as banner ads, are posted on our website and may be accessed by our users. In addition, advertising websites may be accessed directly through our website. Our marketing affiliates are obligated to pay us a portion of the revenue they receive from advertisers as compensation for BigString’s sale of promotional space on our website.
  We generate revenue when our users access the advertisements or advertising websites and purchase products and services. In addition, we generate revenue based on the number of our users accessing advertisements and advertisers’ websites. We also generate revenue based upon the number of impressions per advertisement.
  Products and Services
 BigString offers a web-based, POP3/IMAP server, email service solution. Our patented technology provides a user with the ability to manage and control content sent by email. The user’s email executes through the BigString server but such execution is transparent to the sender and recipients of the email.
  A user of our BigString email services will have his, her or its email transposed from a text-based message through BigString’s server, and an exact, replicated image of the email will be instantaneously streamed to the recipient. The recipient never actually receives the content, but only receives images of the content.
  The user of the BigString email service and products can transparently edit, recall, cancel, and erase the email as well as insert or delete attachments, even after the email has been sent out and opened. All the subsequent changes by the sender will be completely transparent to the recipient. In addition, the sender has complete control over the life and duration of the email. The sender can have the email self-destruct or disappear after a defined number of views or after a certain time period.
  BigString’s current email service provides, at no cost to its users, advanced spam filters, virus protection and large-storage, web-based email accounts with features similar to those offered by AOL®, Yahoo®, Hotmail®, Google®, Verizon® and Comcast®. In addition to the equivalent features provided by competitors, BigString’s email service offers erasable, recallable and self destroying applications, set time or number of views (including ‘view-once’) and masquerading to protect the sender’s privacy and security. It also allows a sender to view tracking reports that indicate when emails were opened by the recipient, and how many times they were viewed. Senders can add, change and/or delete attachments before or after a recipient opened the email. In addition, it allows senders to direct emails to disintegrate in front of their recipient’s eyes and allows senders to create, save and send self-destructing video email.
  Products Offered – BigString currently offers its consumer, business and enterprise customers the following packages:
  Email
  ·
BigString Free Email (No Charge), provides the features of BigString’s email service, includes unlimited GB email storage and permits the user to send unlimited emails per month. It is accessed by the user through the web as web-based email, or webmail, and each user is given one address. Individuals can signup for multiple “disposable” accounts. Wizards help users import previously saved contacts. To personalize their email, users can create an alias, create their own font, add signatures, add pictures to both their profile and their contacts’ profiles, create multiple expire messages, and create custom templates with editable fields and then access the saved templates to save time while composing messages.
  ·
BigString Premium Email ($29.95 per year), offers all the features of the BigString Free Email account, plus vanity domains (yourname@yourdomain.com), POP3 access using any email client (such as Microsoft Outlook®), 30 minute video email and reduced banner advertising.
   3
 Index
  ·
BigString Business Email ($149.95+ per year), offers all the features of the BigString Premium account, plus 10 email accounts, global filter notification and advanced email management. Small and medium sized businesses can customize the number of additional addresses for an additional fee.
  ·
BigString Mobile Email (No Charge), provides access to a user’s email account from the iPhoneTM and other next-generation wireless devices.
  Email Hosting
  ·
BigString Private Label Email ($5,000.00 development, $500.00 per year + revenue share), offers web publishers and content sites BigString’s hosted email platform as a value-added service for their members, and helps generate incremental traffic, page views and ad revenue from their existing members. The private labeled, or white labeled, solution offers a revenue share of advertising and/or premium fees generated by BigString.
  ·
BigString Email Hosting (Enterprise level) ($11,500.00+ per year), offers enterprise level firms all the features of BigString Private Label Email, in a licensed package which can be customized to integrate with the firms’ messaging, networking and video applications.
  Social Network Messaging
  ·
BigString Exploding Messages & Pictures (No Charge), offer social networking members integrated self-destructing messaging applications through their current social network.
  ·
BigString Exploding Video (No Charge), offers social networking members integrated self-destructing video applications through their current social network.
  BigString continues to apply its streaming audio and video experience and technologies into its messaging, email and social network applications.
  Technical and Customer Support – Technical and customer support for BigString’s messaging service and products is available by customers contacting BigString through email.
  Historically, the customers of BigString’s services and products have required very little support. BigString reviews its support capabilities and updates and enhances such capabilities to meet the needs of the users of its products and services. In the future, BigString may outsource the support of its products and services to cost effective call centers or service providers.
  Also available on the BigString website is a Frequently Asked Questions section and a comprehensive BigString User Guide. We believe that BigString’s Frequently Asked Questions section and User Guide usually can resolve most of a user’s problems. As we introduce new products or enhancements to existing products, we expect our Frequently Asked Questions section and User Guide to be updated.
  Protection of Proprietary Rights
 We rely on a combination of U.S. and foreign patent, copyright, trademark and trade secret laws to establish and protect our proprietary rights. In particular, we rely upon our patent for Universal Recallable, Erasable, Secure and Timed Delivery Email, U.S. Patent Number 7,640,307B2; our patent application for Destroyable Instant Messaging (IM), Serial No. 12/060,406; our service mark for the word “BigString,” Serial No. 78/336,856; our service mark for the word “Our Prisoner,” Serial No. 78/751,930; and the protection of our proprietary information afforded by the Lanham Act of 1946, 15 U.S.C. §§ 1051-1127; the Economic Espionage Act of 1996, 18 U.S.C. §1832; the Uniform Trade Secrets Act; as well as by common-law. The patent for Universal Recallable, Erasable and Timed Delivery Email will expire on April 18, 2024, 20 years following the date our patent application was filed. If issued by the United States Patent and Trademark Office, the patent for Destroyable Instant Messaging (IM) will expire on April 1, 2028, 20 years following the date our patent application was filed. Our service marks will not expire provided that we continue to make routine filings to keep it current with the United States Patent and Trademark Office.
  Under the U.S. patent laws, our rights to the intellectual property which is the subject of our patent and patent application may not be infringed upon by a third party. We may assert rights and provisional rights as to the intellectual property covered by the patent and patent application, respectively. BigString may obtain a reasonable royalty from a third party that infringes on a claim, provided actual notice is given to the third party by BigString and with respect to the patent application, that a patent issues from the application with a substantially identical claim.
   4
 Index
 
  Market
 We currently market to Internet users who seek to utilize the Internet as their source for email and messaging services. Generally, our products and services can be readily accessed through the Internet and thus from virtually anywhere the Internet is accessible. Email users can access BigString’s English language site, http://www.BigString.com, on a global basis, 24 hours a day. As of December 31, 2010, BigString visitors accessed our site from 229 countries/territories, compared to 228, 223, 190 and 60 countries/territories as of December 31, 2009, 2008, 2007 and 2006, respectively.
  Competition
 We have existing competitors for our businesses that have greater financial, personnel and other resources, longer operating histories, more technological expertise, more recognizable names and more established relationships in industries that we currently serve or may serve in the future. Increased competition, our inability to compete successfully against current or future competitors, pricing pressures or loss of market share could result in increased costs and reduced operating margins, which could harm our business, operating results, financial condition and future prospects. Many of these firms are well established, have reputations for success and have significantly greater financial, marketing, distribution, personnel, and other resources than us. Further, we may experience price competition, and this competition may adversely affect our financial condition and results of operations or adversely affect our revenues and profitability.
  The markets for our services are highly competitive. With limited barriers to entry we believe the competitive landscape will continue to increase both from new entrants to the market as well as from existing players. We remain focused on delivering better, more advanced and innovative services than our competitors.
  Employees
 We currently have six employees, a portion of which also share their time and expenses with PeopleString. At December 31, 2010, we had six employees. We believe that our relationship with our employees is satisfactory. We have not suffered any labor problems since our inception.
  Darin M. Myman, Robert S. DeMeulemeester and Adam M. Kotkin are members of the board of directors of BigString. Mr. Myman and Mr. DeMeulemeester are key executives of BigString. Mr. Myman, Mr. DeMeulemeester and Mr. Kotkin are also key executives and directors of PeopleString.
  Government Regulation
 We do not currently face direct regulation by any governmental agency, other than laws and regulations generally applicable to businesses.
  Due to the increasing popularity and use of the Internet, it is possible that a number of laws and regulations may be adopted in the U.S. and abroad with particular applicability to the Internet. It is possible that governments will enact legislation that may be applicable to us in areas including network security, encryption, data and privacy protection, electronic authentication or “digital” signatures, access charges and retransmission activities. Moreover, the applicability to the Internet of existing laws governing issues including property ownership, content, taxation, defamation and personal privacy is uncertain.
  The majority of laws that currently regulate the Internet were adopted before the widespread use and commercialization of the Internet and, as a result, do not contemplate or address the unique issues of the Internet and related technologies. Any export or import restrictions, new legislation or regulation or governmental enforcement of existing regulations may limit the growth of the Internet, increase our cost of doing business or increase our legal exposure. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.
  Violations of local laws may be alleged or charged by state or foreign governments, and we may unintentionally violate local laws. Local laws may be modified or new laws enacted, in the future. Any of these developments could have a material adverse effect on our business, results of operations and financial condition.
  5
 Index
  Item1A. Risk Factors
  BigString is a smaller reporting company and is therefore not required to provide this information.
  Item1B. Unresolved Staff Comments
  None.
  Item 2.   Properties
  BigString shares approximately 1,426 square feet of office space at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701 with PeopleString. Our operating lease for these premises is month to month. The current occupancy rate is $2,300 per month. In addition, we lease hosting facilities. While we believe that the offices are adequate to meet our current requirements, we continue to evaluate facility needs and requirements for the future.
  Item3.   Legal Proceedings
  We are not a party to, and none of our property is the subject of, any pending legal proceedings. To our knowledge, no governmental authority is contemplating any such proceedings.
  Item4.   (Removed and Reserved)
  6
 Index
  PART II
   Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
  Market Information
 Our common stock commenced quotation on the NASDAQ OTC Bulletin Board under the trading symbol “BSGC” on May 2, 2006. In late 2010, stock quotations for BigString moved from the NASDAQ OTC Bulletin Board to the NASDAQ OTC Pink Sheets. The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported on the NASDAQ OTC Bulletin Board and NASDAQ OTC Pink Sheets. This information reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
  Year Ended December 31, 2010

High


LowFirst Quarter

$
0.02


$
0.01Second Quarter

$
0.05


$
0.01Third Quarter

$
0.03


$
0.02Fourth Quarter

$
0.04


$
0.02Year Ended December 31, 2009

High


LowFirst Quarter

$
0.02


$
0.01Second Quarter

$
0.03


$
0.01Third Quarter

$
0.05


$
0.02Fourth Quarter

$
0.04


$
0.02
  The NASDAQ OTC Bulletin Board and NASDAQ OTC Pink Sheets are generally considered to be less active and efficient markets than the NASDAQ Global Market, the NASDAQ Capital Market or any national exchange and will not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would offer. As of March 31, 2011, we had over ten market makers for our common stock, including: Archipelago Trading Services, Inc., Automated Trading Services, Inc., Domestic Securities, Inc., E*Trade Capital Markets, LLC, Hudson Securities, Inc., International Trading, LLC, Knight Equity Markets, L.P., Pershing Trading Company, Puma Capital LLC, Rafferty Capital Markets, LLC, The Vertical Group, Inc., UBS Securities, LLC and Vfinance Investments, Inc.
  As of March 31, 2011, the approximate number of registered holders of our common stock was 51. As of March 31, 2011, the number of outstanding shares of our common stock was 137,027,690; the number of outstanding shares of our Series A Preferred Stock was 79,657 (currently convertible into 1,101,452 shares of our common stock); and there were 14,050,000 shares of common stock subject to outstanding warrants, and 6,950,100 shares of common stock subject to outstanding stock options.
  Dividends
 No dividends were declared on BigString’s common stock in the years ended December 31, 2010 and 2009, and it is anticipated that cash dividends will not be declared on BigString’s common stock in the foreseeable future. Our dividend policy is subject to the discretion of our board of directors and depends upon a number of factors, including operating results, financial condition and general business conditions. Holders of common stock are entitled to receive dividends as, if and when declared by our board of directors out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality and overall financial condition.
  Details of Issuance of Shares of Our Common Stock in Connection With Accrued Interest
 On March 5, 2010, BigString issued 2,768,555 shares of its common stock for accrued interest on convertible promissory notes totaling $41,528. BigString issued 1,000,000, 768,879 and 1,000,000 shares of BigString’s common stock to Alpha Capital Anstalt, Excalibur Special Opportunities LP andWhalehaven Capital Fund Limited, respectively. The interest conversion price was $0.015 per share. In connection with the issuance of the common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
   7
 Index
  On May 1, 2010, BigString issued 956,593 shares of its common stock for accrued interest on convertible promissory notes totaling $14,349. BigString issued 848,100 and 108,493 shares of BigString’s common stock to Excalibur Special Opportunities LP andWhalehaven Capital Fund Limited, respectively. The interest conversion price was $0.015 per share. In connection with the issuance of the common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On November 9, 2010, BigString issued 977,167 shares of its common stock for accrued interest on convertible promissory notes totaling $14,658 to Alpha Capital Anstalt. The interest conversion price was $0.015 per share. In connection with the issuance of the common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On December 23, 2010, BigString issued 42,400 shares of its common stock for accrued interest on convertible promissory notes totaling $636 to Whalehaven Capital Fund Limited. The interest conversion price was $0.015 per share. In connection with the issuance of the common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  Details of Issuance of Shares of Our Common Stock in Connection With Conversion of Notes
 On April 28, 2010, BigString issued 2,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $30,000 by Excalibur Special Opportunities LP. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On May 6, 2010, BigString issued 2,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $30,000 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On May 21, 2010, BigString issued 4,833,333 shares of its common stock upon the conversion of convertible promissory notes totaling $72,500. BigString issued 333,333, 2,500,000 and 2,000,000 shares of BigString’s common stock to Alpha Capital Anstalt, Excalibur Special Opportunities LP andWhalehaven Capital Fund Limited, respectively. The interest conversion price was $0.015 per share. In connection with the issuance of the common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On May 24, 2010, BigString issued 2,333,333 shares of its common stock upon the conversion of convertible promissory notes totaling $35,000 by Alpha Capital Anstalt. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On May 28, 2010, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On June 2, 2010, BigString issued 1,333,333 shares of its common stock upon the conversion of convertible promissory notes totaling $20,000 by Alpha Capital Anstalt. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On July 8, 2010, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On September 22, 2010, BigString issued 2,216,667 shares of its common stock upon the conversion of convertible promissory notes totaling $33,250 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On September 29, 2010, BigString issued 3,849,498 shares of its common stock upon the conversion of convertible promissory notes totaling $57,742 by Excalibur Special Opportunities LP. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
   8
 Index
  On November 16, 2010, BigString issued 1,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $15,000 by Alpha Capital Anstalt. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On November 22, 2010, BigString issued 2,500,000 shares of its common stock upon the conversion of convertible promissory notes totaling $37,500 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  On December 23, 2010, BigString issued 2,500,000 shares of its common stock upon the conversion of convertible promissory notes totaling $37,500 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share. In connection with the issuance of such shares, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.
  Item 6.  Selected Financial Data
  BigString is a smaller reporting company and is therefore not required to provide this information.
 
 Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operation
  The following discussion and analysis is intended to provide information about BigString’s financial condition and results of operations for the years ended December 31, 2010 and 2009. This information should be read in conjunction with BigString’s audited consolidated financial statements for the years ended December 31, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through December 31, 2010, including the related notes thereto, which begin on page F-2 of this report.
  Background
 BigString was incorporated in the state of Delaware on October 8, 2003 under the name “Recall Mail Corporation.” The company’s name was formally changed to BigString Corporation in July 2005. BigString was formed to develop technology that would allow the user of email services to have comprehensive control, security and privacy relating to the email generated by the user.
  BigString Interactive, incorporated in the state of New Jersey on January 20, 2006 to develop technology relating to interactive web portals, is a wholly-owned subsidiary of BigString.
  Development Stage Company
 BigString is considered a development stage enterprise in accordance with the guidance contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities.” BigString has limited revenue to date, continues to raise capital and there is no assurance that ultimately BigString will achieve a profitable level of operations.
  Overview
 BigString is a technology firm with a global client base, focused on providing a superior online communications experience for its users. We serve three main email markets: free and premium fee email accounts for individuals; professional business email solutions; and email hosting, private label, and co-branded solutions for web publishers and content sites, such as search engines, social networks, online dating sites, ISPs and social media portals. A few of the key features of our email services include:
  ·
Self-destructing video email that can be programmed to self-destruct after a specific number of viewings or a set time;
 ·
New tracking tools to enable the sender to know when and how many times their email has been opened and if it has been forwarded; and
 ·
Unlimited email storage.
  In addition to our recallable email, we have developed other security focused messaging and social networking products and services.
  9
 Index
  Critical Accounting Policies
 Our discussion and analysis of our financial condition and results of operations are based upon BigString’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires BigString to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, BigString evaluates its estimates, including, but not limited to, those related to such items as costs to complete performance contracts, income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. BigString bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
  BigString believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
  Revenue Recognition. BigString derives revenue from online services, electronic commerce, advertising and data network services. BigString also derives revenue from marketing affiliations. BigString recognizes revenue in accordance with the guidance contained in the ASC 605, “Revenue Recognition.”
  Consistent with the provisions of ASC 605-45-05, BigString generally recognizes revenue associated with its advertising and marketing affiliation programs on a gross basis due primarily to the following factors: BigString is the primary obligor; has general inventory risk; has latitude in establishing prices; has discretion in supplier selection; performs part of the service; and determines specifications.
  Consistent with ASC 605-50-15, BigString accounts for cash considerations given to customers, for which it does not receive a separately identifiable benefit or cannot reasonably estimate fair value, as a reduction of revenue rather than as an expense. Accordingly, any corresponding distributions to customers are recorded as a reduction of gross revenue.
  BigString records its allowance for doubtful accounts based upon an assessment of various factors, including historical experience, age of the accounts receivable balances, the credit quality of customers, current economic conditions and other factors that may affect its customers’ ability to pay.
  Research and Development. BigString accounts for research and development costs in accordance with accounting pronouncements, including ASC 730, “Research and Development,” and ASC 985, “Software.” BigString has determined that technological feasibility for its software products is reached shortly before the products are released. Research and development costs incurred between the establishment of technological feasibility and product release have not been material and have accordingly been expensed when incurred.
  Stock-Based Compensation. BigString accounts for stock-based compensation under ASC 718, “Compensation-Stock Compensation.” The compensation cost for the portion of awards is based on the grant-date fair value of those awards as calculated for either recognition or pro forma disclosures under ASC 718.
  BigString has one stock-based compensation plan under which incentive and nonqualified stock options or rights to purchase stock may be granted to employees, directors and other eligible participants. BigString issues shares of its common stock, warrants to purchase common stock and non-qualified stock options to non-employees as stock-based compensation. BigString accounts for the services using the fair market value of the consideration issued.
  Evaluation of Long-Lived Assets. BigString reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. In accordance with the guidance provided in ASC 360-15-35, “Impairment or Disposal of Long-Lived Assets,” if the carrying value of the long-lived asset exceeds the estimated future undiscounted cash flows to be generated by such asset, the asset would be adjusted to its fair value and an impairment loss would be charged to operations in the period identified.
  Intangibles. ASC 350, “Goodwill and Other,” specifies the financial accounting and reporting for acquired goodwill and other indefinite life intangible assets. Goodwill and other indefinite-lived intangible assets are no longer amortized, but are reviewed for impairment at least annually.
   10
 Index
  Accounting for Derivatives. BigString evaluates its options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815-15-10, “Hedging and Derivatives-Embedded Derivatives” and related interpretations including ASC 815-40-05, “Hedging and Derivatives-Contracts in Entity’s Own Equity.”
  Recent Accounting Pronouncements.BigString’s significant accounting policies are summarized in Note 1 of BigString’s consolidated financial statements for the years ended December 31, 2010 and 2009. There were no significant changes to these accounting policies during the years ended December 31, 2010 and 2009 and BigString does not expect that the adoption of other recent accounting pronouncements will have a material impact on its consolidated financial statements.
  Results of Operations
  For the Years Ended December 31, 2010 and 2009
 Net Loss. For the year ended December 31, 2010, net loss was $540,601, as compared to a net loss of $968,848 for the year ended December 31, 2009. The $428,247 decrease in net loss was primarily attributable to a decrease in operating expenses of $776,205, partially offset by a reduction in income tax benefit of $310,108.
  Revenues. For the year ended December 31, 2010, revenues were $69,201, a $13,499 decrease from revenues of $82,700 generated during the year ended December 31, 2009. Of the revenues generated for the year ended December 31, 2010, $52,907 was generated from product and service fees and $16,294 was generated from advertisers, as compared to $54,733 from product and service fees and $27,967 from advertisers for the year ended December 31, 2009.
  The 16% decrease in net revenues for the year ended December 31, 2010 over the same prior year period was primarily due to decreased advertising revenues of $11,673. As of December 31, 2010, unearned revenue from product fees decreased to $1,303 from $1,649 at December 31, 2009.
  Operating Expenses. For the year ended December 31, 2010, operating expenses were $182,060, a $776,205 decrease from operating expenses of $958,265 incurred in the year ended December 31, 2009.
  ·
Cost of revenues: Cost of revenues for the year ended December 31, 2010 was $46,622, as compared to $62,163 for the prior year. The $15,541 decrease in cost of revenues was primarily attributable to reduced hosting expenses.
  ·
Research, development, sales, general and administrative: Research, development, sales, general and administrative expenses for the year ended December 31, 2010 were $135,438, as compared to $896,102 for the prior year. The $760,664 decrease in expenses was primarily attributable to reduced marketing, professional, staffing and associated overhead expenses.
  Other income (expense). For the year ended December 31, 2010, other expenses were $427,742, a $24,351 increase over other expenses of $403,391 incurred in the year ended December 31, 2009.
  ·
Interest income: Interest income for the year ended December 31, 2010 was $45, as compared to $68 for the prior year. The $23 decrease in income was primarily due to a decrease in cash balances.
  ·
Interest expense: Interest expense for the year ended December 31, 2010 was $92,680, as compared to $84,224 for the prior year. The $8,456 increase in expense was primarily due to higher interest rates.
  ·
Other, net: Other, net expense for the year ended December 31, 2010 was $335,107, as compared to $319,235 for the prior year. The $15,872 net increase in expense was primarily due to no gains for the year ended December 31, 2010, as compared to $126,882 in gains for the prior year, partially offset by reduced amortization expenses of $111,010.
  Income Taxes. For the year ended December 31, 2010, we had no net income tax benefits, as compared to net income tax benefits of $310,108 for the year ended December 31, 2009.
  ·
For the year ended December 31, 2009, BigString participated in the state of New Jersey’s Corporation Business Tax Benefit Certificate Transfer program (the “Program”), which allows certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey corporation business taxpayers. The Program requires that the purchaser pay at least 75% of the amount of the surrendered tax benefit. BigString did not meet the revised criteria for participation in the Program for the year ended December 31, 2010. For the year ended December 31, 2009, BigString accrued a net state tax benefit of $310,108 as a result of its sale of $3,849,878 of New Jersey state net operating losses. Gross sales proceeds were $346,489. BigString may be able to transfer its unused New Jersey net operating losses and research and development credits in future years.
   11
 Index
  ·
Valuation allowances for the years ending December 31, 2010 and 2009, have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as BigString continues to incur losses. At December 31, 2010, BigString has available net operating loss carry forwards of approximately $13.3 million for federal income tax reporting purposes and $1.9 million for state income tax reporting purposes which expire in various years through 2030. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s net operating loss and research credit carry forwards may be limited, and, as such, BigString may be restricted in using its net operating loss and research credit carry forwards to offset future federal income tax expense.
  Liquidity and Capital Resources
 Our operating and capital requirements have exceeded our cash flow from operations as we have been building our business. Since inception through December 31, 2010, we have expended $5,356,308 for operating and investing activities, which has been primarily funded by investments of $5,371,533 from our stockholders and convertible note holders. For the year ended December 31, 2010, we generated $12,186 from our operating and investing activities, an increase of $367,934 from the $355,748 expended during the year ended December 31, 2009.
  Our cash balance as of December 31, 2010 was $15,225, which was an increase of $12,186 from our cash balance of $3,039 as of December 31, 2009. This increase to our cash balance was primarily associated with the receipt of a receivable offsetting cash expenses.
  As described herein, BigString participated in the state of New Jersey’s Program, which allows certain high technology and biotechnology companies to sell unused NOL carryforwards and research and development credits to other New Jersey corporation business taxpayers. On January 11, 2010, BigString received net proceeds of $310,108. BigString may also be able to transfer its unused New Jersey net operating losses and research and development credits in future years and plans to evaluate the Program for future participation.
  In March 2011, BigString sold 1,850,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $740,000. As of March 31, 2011, BigString owned 6,125,600 shares of PeopleString common stock, approximately 17.7% of the issued and outstanding shares. In April 2011, BigString sold 650,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $260,000. As of April 12, 2011, BigString owned 5,475,600 shares of PeopleString common stock, approximately 15.8% of the issued and outstanding shares.
  Management believes its current cash balance of approximately $1,009,000 at April 12, 2011 is sufficient to fund the minimum level of operations for the next nine months.
  Our consolidated financial statements beginning on page F-2 have been prepared assuming we will continue as a going concern. As more fully explained in Note 2 to our consolidated financial statements, we have a working capital deficit and have incurred losses since operations commenced. Our continued existence is dependent upon our ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as we continue to incur losses. However, there can be no assurance that such funds will be available to us or, if available, on terms satisfactory to us. Our failure to obtain adequate additional financing may require us to delay or curtail some or all of our business efforts and could cause us to seek bankruptcy protection. Any additional equity financing may involve substantial dilution to our then-existing stockholders. These uncertainties raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties should we be unable to continue as a going concern.
  In addition, if the revenue from our operations are not adequate to allow us to pay the principal and interest on the outstanding convertible notes, and the convertible notes are not converted into shares of common stock, we will seek additional equity financing and/or debt financing. It is also possible that we will seek to borrow money from traditional lending institutions, such as banks.
  Our current officers and directors have not, as of the date of this filing, loaned any funds to BigString. There are no formal commitments or arrangements to advance or loan funds to BigString or repay any such advances or loans.
 
 12
 Index
  Item 7A. Quantitative and Qualitative Disclosure About Market Risk
  BigString is a smaller reporting company and is therefore not required to provide this information.
  Item 8.   Financial Statements and Supplementary Data
  The consolidated financial statements and supplementary data of BigString called for by this item are submitted under a separate section of this report. Reference is made to the Index of Financial Statements contained on page F-1 herein.
  Item9.  Changes In and Disagreements With Accountants on Accounting and FinancialDisclosure
  None.
  Item 9A. Controls and Procedures
  (a) Evaluation of disclosure controls and procedures.
  Management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
  Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2010, 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 SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
  (b) Changes in internal control over financial reporting.
  We 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, and migrating processes.
  There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
  (c) Management’s report on internal control over financial reporting.
  Management is responsible for establishing and maintaining adequate control over financial reporting for BigString. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of BigString; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of BigString are being made only in accordance with authorizations of management and directors of BigString; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of BigString’s assets that could have a material effect on the financial statements.
  13
 Index
   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
  Management, with the participation of our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of BigString’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2010.
  Item9B.Other Information
 
 None.
  14
 Index
   PART III
  Item 10.Directors, Executive Officers and Corporate Governance
  Directors
 Number of Directors. Our board of directors currently consists of three individuals. Our Amended and Restated Bylaws provide that the board of directors may consist of a minimum of three directors and a maximum of twelve, as determined by the board of directors from time to time.
  Director Qualifications. While the selection of directors is a complex and subjective process that requires considerations of many intangible factors, the Company believes that candidates should generally meet the following criteria:
  ·
Broad training, experience and a successful track record at senior policy-making levels in business, government, education, technology, accounting, law, consulting and/or administration;·
The highest personal and professional ethics, integrity and values;
 ·
Commitment to representing the long-term interests of the Company and all of its shareholders;·
An inquisitive and objective perspective, strength of character and the mature judgment essential to effective decision-making;
 ·
Expertise that is useful to the Company and complementary to the background and experience of other Board members; and·
Sufficient time to devote to Board and committee activities and to enhance their knowledge of our business, operations and industry.
  The Board believes that all of our directors meet these criteria. In addition, as outlined below, each director brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas, including the messaging industry, related Internet industries, finance and accounting, operations, corporate governance, board service and executive management. We believe that the Board as a whole and each of our directors possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance and serve our best interests and the best interests of our stockholders.
  Audit Committees. The Audit Committee of the Board is responsible for developing and monitoring the audit of BigString. The Audit Committee selects the outside auditor and meets with the Board to discuss the results of the annual audit and any related matters. The Audit Committee also receives and reviews the reports and findings and any other information presented to members of the Audit Committee by the officers of BigString regarding financial reporting policies and practices.
  Compensation for Board of Directors: Currently members of the Board of Directors do not receive compensation for their services as Board members. In the future, the Company may adopt a policy which will compensate existing and/or new Board members. Board members may receive additional compensation for participating on Board committees. The amount of any compensation paid to Board members and/or committee members will be set and approved by the Board based on the Board’s review of compensation paid by companies which are similarly situated to BigString.
  Each director serves for a term set to expire at the next annual meeting of stockholders of BigString. The name, age, principal occupation or employment and biographical information of each member of the Board of Directors of BigString who served as of December 31, 2010 are set forth below:
  Name and Address

Age

Principal Occupation or EmploymentDarin M. Myman

46

President and Chief Executive Officer of BigStringRobert S. DeMeulemeester

44

Executive Vice President, Chief Financial Officer, Secretary and Treasurer of BigStringAdam M. Kotkin

31

Chief Operating Officer of PeopleString Corporation
  There are no family relationships among BigString’s directors and executive officers. None of the directors of BigString has served as a director of any company registered pursuant to Section 12 of the Exchange Act, or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940, as amended, during the last five years, except that Mr. Myman, Mr. DeMeulemeester and Mr. Kotkin are directors of PeopleString; and Mr. Kotkin is a director of Apps Genius Corporation.
  15
 Index
  Biographical Information
 Darin M. Myman (Age 46)is a co-founder of BigString and has served as the President and Chief Executive Officer of BigString since its inception on October 8, 2003. He also has served as a member of BigString’s Board of Directors since BigString’s inception. Mr. Myman developed extensive Internet skills through a variety of positions. He has executive management and founder experience having served as a co-founder and CEO of PeopleString, a publicly traded company, since January 2009. He also has corporate governance and board experience having served as a member of PeopleString’s Board of Directors since PeopleString’s inception. Prior to BigString, Mr. Myman was a co-founder and Chief Executive Officer of LiveInsurance.com, the first online insurance broker that pioneered the electronic storefront for large national insurance agencies. Prior to co-founding LiveInsurance.com, he served as a Vice President of the online brokerage services unit of Westminster Securities Corporation. Mr. Myman’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as our President and Chief Executive Officer and as a Director.
  Robert S. DeMeulemeester (Age 44)has served as Executive Vice President, Chief Financial Officer and Treasurer of BigString since September 2006. He also has served as a member of BigString’s Board of Directors since May 30, 2007, and was appointed as Secretary of BigString on March 14, 2011. Mr. DeMeulemeester developed extensive financial skills through a variety of positions. He also has Internet and executive management experience having served as a co-founder and Executive Vice President, Chief Financial Officer and Treasurer of PeopleString, a publicly traded company, since January 2009. He also has corporate governance and board experience having served as a member of PeopleString’s Board of Directors since its inception. Prior to joining BigString, from 1998 to 2006, Mr. DeMeulemeester served as managing director and treasurer of the Securities Industry Automation Corporation ("SIAC"), a New York based provider of automated information and communication systems that supports NYSE Euronext, the American Stock Exchange and related affiliates. He also served as managing director, CFO and controller of Sector, Inc. From 1993 to 1997, he gained marketing, business development and finance experience having served as an executive at Honeywell International Inc. (formerly AlliedSignal, Inc.) and from 1989 to 1991 as a management consultant at Accenture (formerly Andersen Consulting). Mr. DeMeulemeester earned his MBA at Columbia Business School, Columbia University and his Bachelor of Science, in Industrial Engineering at Lehigh University. Mr. DeMeulemeester’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as our Executive Vice President, Chief Financial Officer, Secretary and Treasurer and as a Director.
  Adam M. Kotkin (Age 31)has served as a member of BigString’s Board of Directors since June 29, 2005. He also served as the Chief Operating Officer of BigString since its inception on October 8, 2003 through November 12, 2010 and as Secretary of BigString from August 17, 2005 through November 12, 2010.  Mr. Kotkin has executive management experience having served as the Chief Operating Officer of PeopleString, a publicly traded company, since January 2009 and as the Chief Executive Officer of Apps Genius Corporation since its inception on December 17, 2009. He also has corporate governance and board experience having served as a member of PeopleString’s Board of Directors since PeopleString’s inception and as the sole member of Apps Genius’ Board of Directors since Apps Genius’ inception. Prior to joining BigString, he gained operating and Internet experience having served as a business manager for InsuranceGenie.com. Prior thereto, Mr. Kotkin developed sales skills having served as business developer and sales manager at LiveInsurance.com from March 1999 until December 2000. Mr. Kotkin graduated with distinction from New York University with a BA in Economics. Mr. Kotkin’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as a Director.
  Executive Officers
 The name, age, current position and biographical information of each executive officer of BigString are set forth below:
  Name

Age

PositionDarin M. Myman

46

President and Chief Executive OfficerRobert S. DeMeulemeester

44

Executive Vice President, Chief Financial Officer, Secretary and Treasurer
  For the biographical information for the above listed executive officers, see “Directors.” Adam M. Kotkin resigned as Chief Operating Officer and Secretary of BigString on November 12, 2010.
  16
 Index
  Section 16 Compliance
 Section 16(a) of the Exchange Act requires BigString’s executive officers and directors, and persons who own more than ten percent of a registered class of BigString’s equity securities, to file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (the “SEC”). Executive officers, directors and greater than ten percent stockholders are required by SEC regulation, to furnish BigString with copies of all Forms 3, 4 and 5 they file.
  Based solely upon a review of Forms 3 and 4 (and amendments thereto) furnished to BigString during the year ended December 31, 2010 and Forms 5 (and amendments thereto) furnished to BigString with respect to the year ended December 31, 2010, BigString believes that all filings required to be made by its executive officers and directors pursuant to Section 16(a) of the Exchange Act have been filed within the time periods prescribed.
  Chief Executive and Senior Financial Officer Code of Ethics
 The chief executive and senior financial officers of BigString are held to the highest standards of honest and ethical conduct when conducting the affairs of BigString. All such individuals must act ethically at all times in accordance with the policies contained in BigString’s Chief Executive and Senior Financial Officer Code of Ethics. Copies of the Chief Executive and Senior Financial Officer Code of Ethics will be furnished without charge upon written request received from any stockholder of record. Requests should be directed to BigString Corporation, 157 Broad Street, Suite 109, Red Bank, New Jersey 07701, Attention: Secretary.
  Item 11.Executive Compensation
  EXECUTIVE COMPENSATION
  The following table sets forth information concerning the annual and long-term compensation of the Named Executive Officers (as defined below) for services in all capacities to BigString for the years ended December 31, 2010 and 2009. The Named Executive Officers are Darin M. Myman, President and Chief Executive Officer, and Robert S. DeMeulemeester, Executive Vice President, Chief Financial Officer, Secretary and Treasurer (the “Named Executive Officers”).
  2010 SUMMARY COMPENSATION TABLEName and PrincipalPosition

Year

Salary

($)


Bonus

($)


Stock

Awards

($)


Option

Awards

($) (1)


Non-Equity

Incentive Plan

Compensation

($)


Nonqualified

Deferred

Compensation

Earnings

($)


All Other

Compensation

($)


Total

($)Darin M. Myman,

2010

$
70,100


$
---


$
---


$
---


$
---


$
---


$
15,719(2)


$
85,819President and Chief

Executive Officer

2009

$
57,056


$
---


$
---


$
13,927


$
---


$
---


$
9,733(2)


$
80,716Robert S.

2010

$
100


$
---


$
---


$
---


$
---


$
---


$
---


$
100DeMeulemeester,

Executive Vice

President, Chief

Financial Officer, Secretary and

Treasurer (3)

2009

$
13,050


$
---


$
---


$
14,201


$
---


$
---


$
---


$
27,251
 ____________
 (1)
The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the years ended December 31, 2010 and 2009 in accordance with ASC 718, of stock option awards pursuant to the Equity Incentive Plan (as defined below). The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Assumptions used in the calculation of these amounts are included in the footnotes to BigString’s audited financial statements furnished herewith.(2)
Represents amounts reimbursed for automobile expenses.(3)
Please see “Certain Relationships and Related Transactions and Director Independence – Related Party Transactions” below for information on additional amounts paid to Mr. DeMeulemeester.
 
  17
 Index
  Chief Financial Officer - Employment Agreement
 Mr. DeMeulemeester and BigString entered into a letter agreement, effective September 18, 2006 (the “Letter Agreement”), pursuant to which BigString has employed Mr. DeMeulemeester as Executive Vice President, Chief Financial Officer and Treasurer of BigString, on an “at will” basis, whereby either BigString or Mr. DeMeulemeester can terminate his employment at any time for any reason or no reason. Pursuant to the terms of the Letter Agreement, BigString will pay Mr. DeMeulemeester an annual base salary of $130,000, which base salary will increase to $200,000 in the event BigString participates in one or more offerings of its securities and BigString receives, in the aggregate, more than $2,000,000 in net proceeds from such offering(s). At such time, Mr. DeMeulemeester will receive a lump sum payment, subject to any withholding required by law, equal to the difference between (a) the total amount of base salary paid to him up until the date of the increase to his base salary and (b) the total amount of base salary that would have been paid to him up until the date of the increase to his base salary, if his base salary was $200,000 as of September 18, 2006. To alleviate constraints on BigString’s limited financial resources during the years ended December 31, 2010 and 2009, Mr. DeMeulemeester’s base salary was reduced for such years.
  Mr. DeMeulemeester is also entitled to benefits afforded to all full-time employees of BigString, including medical and dental, as applicable. Moreover, Mr. DeMeulemeester may be eligible for certain bonuses in connection with his performance, to be determined and awarded in the sole discretion of BigString’s Board of Directors and Compensation Committee.
  In connection with BigString’s employment of Mr. DeMeulemeester, BigString granted him an incentive stock option to purchase 1,800,000 shares of BigString’s common stock, par value $0.0001 per share. See “Outstanding Equity Awards at Fiscal Year-End.” The incentive stock option was granted under the BigString Corporation 2006 Equity Incentive Plan (the “Equity Incentive Plan”) and is currently fully vested. 400,000 shares of common stock subject to the incentive stock option are eligible for purchase at $0.24, the per share price equal to the Fair Market Value (as such term is defined in the Equity Incentive Plan) of one share of common stock on date of grant; 600,000 shares of common stock are eligible for purchase at $0.50 per share; 400,000 shares of common stock are eligible for purchase at $0.90 per share; and 400,000 shares of common stock are eligible for purchase at $1.25 per share.
  In the event Mr. DeMeulemeester’s employment is terminated by BigString for any reason other than Cause (as defined in the Letter Agreement) after BigString is in receipt of more than $2,000,000 in net proceeds as a result of one or more offerings of its securities, or if Mr. DeMeulemeester’s employment is terminated by BigString or a successor entity for any reason other than Cause after or in connection with a Change of Control (as defined in the Equity Incentive Plan), Mr. DeMeulemeester will receive a lump sum payment equal to two months of his base salary, subject to any withholding required by law, within three days of the date his employment is terminated.
  No other officer or employee of BigString has an employment agreement with BigString. At the discretion of our Board of Directors, BigString may in the future enter into employment agreements with one or more of its officers or other employees.
  2006 Equity Incentive Plan
 Pursuant to the Equity Incentive Plan, which was approved by the stockholders of BigString at its 2006 annual meeting of stockholders, options to purchase up to 15,000,000 shares of common stock may be granted to employees and directors of BigString who are in a position to make significant contributions to the success of BigString. As of December 31, 2010, stock options to purchase 6,075,000 shares of common stock were outstanding under the Equity Incentive Plan.
  Securities Authorized for Issuance under Equity Compensation Plans
 The number of stock options outstanding under the Equity Incentive Plan, the weighted-average exercise price of outstanding stock options, and the number of securities remaining available for issuance as of December 31, 2010 were as follows:
  18
 Index
 2010 EQUITY COMPENSATION PLAN TABLE
  Plan category

Number of securities

to be issued upon

exercise of

outstanding options,

warrants and rights

(a)


Weighted average

exercise price of

outstanding options,

warrants and rights

(b)


Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

column (a))

(c)Equity compensation plansapproved by security holders (1)


6,075,000
(2)

$
0.34



8,925,000Equity compensation plans notapproved by security holders


14,925,100
(3)

$
0.14



---Total


21,000,100


$
0.20



8,925,000
 ________________
 (1)
BigString currently has no stockholder approved equity compensation plan other than the Equity Incentive Plan described herein.(2)
Represents options to purchase common stock outstanding at December 31, 2010 issued under the Equity Incentive Plan. See discussion above for additional information.(3)
Includes warrants to purchase 14,050,000shares of common stock which were issued and outstanding as of December 31, 2010 and 575,100 shares of common stock subject to an outstanding non-qualified stock option issued to Kieran Vogel in connection with his participation in BigString’s OurPrisoner program and 300,000shares of common stock issued to a vendor under a partnering arrangement.
  Equity Compensation Arrangements Not Approved by Stockholders
  Warrant Grants during the Year Ended December 31, 2010
 BigString did not issue warrants during the year ended December 31, 2010.
  Additional Outstanding Warrants at December 31, 2010
 On May 2, 2006, BigString granted two warrants to Lifeline Industries, Inc. as payment for consulting services. 225,000 shares of common stock remain available for purchase under one warrant at a per share purchase price of $0.48 and 225,000 shares of common stock remain available for purchase under one warrant at a per share purchase price of $1.00. Each of these warrants is set to expire on May 2, 2011.
  On May 19, 2006, BigString granted a warrant to each of Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd., and Tudor Proprietary Trading, L.L.C. as part of an investment. An aggregate of 1,000,000 shares of common stock remain available for purchase under each warrant at a per share purchase price of $1.25. Each of these warrants is set to expire on May 19, 2016.
  On July 11, 2006, BigString issued a non-qualified stock option to purchase 575,100 shares of common stock to Kiernan Vogel in connection with his participation in BigString’s OurPrisoner program. The non-qualified stock option has a term of five years from July 11, 2006 and an exercise price of $0.32 per share.  This non-qualified stock option is set to expire on July 11, 2011.
  On December 1, 2006, BigString granted a warrant to each of two consultants as payment for advisory services. 100,000 shares of common stock in the aggregate remain available for purchase under each warrant at a per share purchase price of $0.50. Each of these warrants is set to expire on December 1, 2011.
  On May 1, 2007, BigString entered into a subscription agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear (collectively, the “2007 Subscribers”), pursuant to which the 2007 Subscribers purchased convertible promissory notes in the aggregate principal amount of $800,000, which promissory notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 1,777,778 shares of BigString’s common stock. Each promissory note has a term of three (3) years and accrues interest at a rate of 6% annually. The holder of a convertible promissory note has the right from and after the issuance thereof until such time as the convertible promissory note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.18 per share (as adjusted). The conversion price and number and kind of shares to be issued upon conversion of the convertible promissory note are subject to adjustment from time to time. Each of the warrants issued to the 2007 Subscribers has a term of five years from May 1, 2007 and was fully vested on the date of issuance. The outstanding warrants are exercisable at $0.30 per share of common stock, as adjusted.
  BigString also issued to Gem Funding LLC warrants to purchase an aggregate of 213,333 shares of BigString’s common stock, which are similar to and carry the same rights as the warrants issued to the 2007 Subscribers.
  19
 Index
  On February 29, 2008, BigString entered into a subscription agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP (collectively, the “2008 Subscribers”), pursuant to which the 2008 Subscribers purchased convertible promissory notes in the aggregate principal amount of $700,000, which promissory notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 2,333,333 shares of BigString’s common stock. Each promissory note has a term of three (3) years and accrues interest at a rate of 6% annually. The holder of a convertible promissory note has the right from and after the issuance thereof until such time as the convertible promissory note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.15 per share (as adjusted). The conversion price and number and kind of shares to be issued upon conversion of the convertible promissory note are subject to adjustment from time to time. Each of the warrants issued to the 2008 Subscribers has a term of five (5) years from February 29, 2008 and was fully vested on the date of issuance. The outstanding warrants are exercisable at $0.15 per share of common stock, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.
  BigString also issued to Gem Funding LLC warrants to purchase an aggregate of 373,333 shares of BigString’s common stock, which are similar to and carry the same rights as the warrants issued to the 2008 Subscribers.
  On August 25, 2008, BigString entered into a financing arrangement with Dwight Lane Capital, LLC, a limited liability company in which Todd M. Ross, a former director of BigString, has an interest, and Marc W. Dutton, a former director of BigString. In connection with such financing, BigString issued promissory notes in the aggregate principal amount of $250,000 and common stock purchase warrants to purchase up to an aggregate 800,000 shares of BigString's common stock. Each note had a term of five months and accrued interest at a rate of 12% annually. The warrants have an exercise price of $0.08 per share. In December 2008, all amounts due under the notes were paid by BigString, including accrued interest of $9,328, and, as a result, the notes were cancelled.
  On November 17, 2008, BigString issued a non-qualified stock option to purchase 300,000 shares of BigString’s common stock to a BigString vendor under a partnering arrangement. The non-qualified stock option has a term of five years from November 17, 2008 and an exercise price of $0.08 per share.
  On June 23, 2009, BigString entered into a subscription agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP (collectively, the “2009 Subscribers”), pursuant to which the 2009 Subscribers purchased convertible promissory notes in the aggregate principal amount of $180,000, which promissory notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 6,000,000 shares of BigString’s common stock. Each promissory note has a term of two (2) years and accrues interest at a rate of 6% annually. The holder of a convertible promissory note has the right from and after the issuance thereof until such time as the convertible promissory note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.015 per share (as adjusted). The conversion price and number and kind of shares to be issued upon conversion of the convertible promissory note are subject to adjustment from time to time. Each of the warrants issued to the 2009 Subscribers has a term of five (5) years from June 23, 2009 and was fully vested on the date of issuance. The outstanding warrants are exercisable at $0.015 per share of common stock, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.
  Outstanding Equity Awards at Fiscal Year End
 The following table provides information about all equity compensation awards held by the Named Executive Officers at December 31, 2010:
  OUTSTANDING EQUITY AWARDS FOR THE YEAR ENDED DECEMBER 31, 2010Name

Date of

Grant

Number of

Securities

Underlying

Unexercised

Options

(#) Exercisable

Number of

Securities

Underlying

Unexercised

Options

(#) Unexercisable

Equity Incentive

Plan Awards:

Number of Securities

Underlying Unexercised

Unearned Options

(#)

Option

Exercise

Price

($)

Option

Expiration

DateDarin M.Myman,

President and

Chief ExecutiveOfficer

4/11/08


500,000


--


--

$
0.21

4/11/13Robert S. DeMeulemeester,

4/11/08


500,000


--


--

$
0.21

4/11/13Executive VicePresident,

11/14/07


500,000


--


--

$
0.18

11/14/17Chief Financial Officer,

9/18/06


400,000


--


--

$
0.24

9/18/16Secretary and Treasurer

9/18/06


600,000


--


--

$
0.50

9/18/169/18/06


400,000


--


--

$
0.90

9/18/169/18/06


400,000


--


--

$
1.25

9/18/16
 
  20
 Index
  Risk Management
 The Board of Directors does not believe that BigString’s executive compensation program gives rise to any risks that are reasonably likely to have a material adverse effect on BigString. Executive officers are compensated on a salary basis and have not been awarded any bonuses or other compensation in 2010 and 2009 that might encourage the taking of unnecessary or excessive risks that threaten the long-term value of BigString. The Board has sought to align the interests of the executive officers with the long-term interests of BigString and its stockholders though grants of stock options under the Equity Incentive Plan, thereby giving the executive officers additional motivation to protect the long-term value of BigString.
  DIRECTOR COMPENSATION
  The following table sets forth information concerning the compensation of the directors of BigString for the year ended December 31, 2010.
  2010 DIRECTOR COMPENSATION TABLE
  Name

Fees

Earned or

Paid inCash

($)(1)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)Darin M. Myman

$
--


$
--


$
--


$
--


$
--


$
--


$
--Robert S. DeMeulemeester

$
--


$
--


$
--


$
--


$
--


$
--


$
--Adam M. Kotkin

$
--


$
--


$
--


$
--


$
--


$
--


$
--
 ________________________
 
 (1)
BigString does not currently pay its directors any retainer or other fees for service on the Board or any committee thereof.
  BigString did not have non-employee directors as of December 31, 2010.
  21
 Index
  Item12. Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters
  Principal Stockholders and Security Ownership of Management
 The following table sets forth information as of March 31, 2011 with respect to the beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of BigString’s common stock by (1) each director of BigString, (2) the Named Executive Officers of BigString, (3) each person or group of persons known by BigString to be the beneficial owner of greater than 5% of BigString’s outstanding common stock, and (4) all directors and officers of BigString as a group:
  BENEFICIAL OWNERSHIP OF COMMON STOCK
  Name of Beneficial Owner:




PercentDirectors, Officers and 5% Stockholders

No. of Shares (1)


of ClassDarin M. Myman (2)(3)(4)(5)


9,500,000



6.91
%Robert S. DeMeulemeester (2)(3)(6)(7)


2,842,300



2.03
%Adam M. Kotkin (2)(3)(8)(9)


2,872,500



2.06
%Alpha Capital Anstalt (10)


28,229,167



17.19
%Whalehaven Capital Fund Limited (11)


9,319,572



6.61
%Jo Myman (2)(12)


9,500,000



6.91
%All Directors and Executive Officers as a Group (3 persons) (5)(7)(9)


15,214,800



10.68
%
 ____________
 (1)
In accordance with Rule 13d-3 of the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of BigString’s common stock if he or she has voting or investment power with respect to such security. This includes shares (a) subject to options exercisable within sixty (60) days, and (b)(1) owned by a spouse, (2) owned by other immediate family members, or (3) held in trust or held in retirement accounts or funds for the benefit of the named individuals, over which shares the person named in the table may possess voting and/or investment power.(2)
This executive officer and/or director, or spouse of an executive officer and/or director, maintains a mailing address at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701.(3)
Such person currently serves as a director of BigString.(4)
Mr. Myman serves as the President and Chief Executive Officer of BigString.(5)
Includes 100,000 shares of common stock registered in the name of Mr. Myman’s wife, Jo Myman, and 900,000 shares of common stock held by Mr. Myman for the benefit of Mr. and Mrs. Myman’s children under the Uniform Transfers to Minors Act. Mr. Myman disclaims any beneficial interest in the shares held by his wife and the shares held by him as custodian for his children. Includes 500,000 shares of common stock subject to currently exercisable stock options.(6)
Mr. DeMeulemeester serves as Executive Vice President, Chief Financial Officer, Secretary and Treasurer of BigString.(7)
Includes options to purchase 2,800,000 shares of common stock.(8)
Mr. Kotkin resigned as Chief Operating Officer and Secretary of BigString on November 12, 2010.(9)
Includes options to purchase 2,150,000 shares of common stock.(10)
Includes 23,166,667 shares of common stock issuable upon the conversion of issued and outstanding convertible notes. Also includes 4,062,500 shares of common stock issuable upon the exercise of issued and exercisable warrants. Konrad Ackerman has voting and investment control over shares held by Alpha Capital Anstalt. Mr. Ackerman disclaims beneficial ownership of such shares. Alpha Capital Anstalt maintains a mailing address at Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein.(11)
Includes 4,062,500 shares of common stock issuable upon the exercise of issued and exercisable warrants. Michael Finkelstein has voting and investment control over shares held by Whalehaven Capital Fund Limited. Mr. Finkelstein disclaims beneficial ownership of such shares. Whalehaven Capital Fund Limited maintains a mailing address at Whalehaven Capital Fund c/o FWS Capital Ltd., 3rd Fl., 14-Par-Laville Road, Hamilton, Bermuda HM08.(12)
Includes 8,000,000 shares of common stock registered in the name of her husband, Darin M. Myman, and 900,000 shares of common stock held by Mr. Myman for the benefit of Mr. and Mrs. Myman’s children under the Uniform Transfers to Minors Act, as to which shares Mrs. Myman disclaims any beneficial ownership.
  Change in Control
 Management believes that a change in control of BigString may occur in the future in the event that Whalehaven Capital Fund Limited and/or Alpha Capital Anstalt converts and exercises all or substantially all of the convertible notes and warrants to purchase shares of BigString’s common stock held by them.
  22
 Index
  Item 13. Certain Relationships and Related Transactions and Director Independence
  Related Party Transactions
 On December 29, 2008, in order to alleviate constraints on BigString’s limited financial resources, BigString signed an agreement with Digital BobKat, LLC, a limited liability company in which Robert S. DeMeulemeester, an officer and director of BigString, has an interest. Digital BobKat, LLC provides business consulting services, including, but not limited to, management, product development, marketing, research, advertising and general business and administrative procedures and processes. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Payments are due monthly and are based on fair market value of the services provided, similar to the terms of a transaction with an unrelated party. Expenses for the years ended December 31, 2010 and 2009 were $78,436 and $30,000, respectively.
  Meetings and Committees of the Board of Directors
 The Board of Directors of BigString conducts business through meetings of the Board or by unanimous written consents of the Board. The Board of Directors for 2010 consisted of Robert S. DeMeulemeester, Adam M. Kotkin and Darin M. Myman following the election of directors at the 2008 annual meeting of stockholders. BigString did not hold an annual meeting in 2009 or 2010. None of Mr. DeMeulemeester, Mr. Kotkin or Mr. Myman qualifies as an independent director in accordance with NASDAQ’s definition of “independent director” and the rules and regulations of the SEC. During 2010, the Board held three (3) meetings, and the Board acted by unanimous written consent on one(1)occasion.
  For the year ended December 31, 2010, the Audit Committee consisted of directors Robert S. DeMeulemeester and Adam M. Kotkin. Mr. DeMeulemeester served as the Chair of the Audit Committee. Neither Mr. DeMeulemeester nor Mr. Kotkin qualified as an independent director under NASDAQ’s definition of “independent director” in fiscal 2010. The Board has determined that Mr. DeMeulemeester qualifies as a financial expert under the rules of the SEC. The Audit Committee selected the accounting firm of Madsen & Associates CPAs, Inc. to act as BigString’s independent public accounting firm for the year ended December 31, 2010 and audit the financial statements of BigString for such year. The Audit Committee met five (5) times during 2010, with all members attending such meeting.
  For the year ended December 31, 2010, the Compensation Committee consisted of director Darin M. Myman. Mr. Myman served as the Chair of the Compensation Committee. Mr. Myman did not qualify as an independent director under NASDAQ’s definition of “independent director” in fiscal 2010. The Compensation Committee did not meet during 2010.
  For the year ended December 31, 2010, the Nominating and Corporate Governance Committee consisted of directors Darin M. Myman and Adam M. Kotkin. Mr. Myman served as the Chair of the Nominating and Corporate Governance Committee. Neither Mr. Myman nor Mr. Kotkin qualified as an independent director under NASDAQ’s definition of “independent director” in fiscal 2010. The Nominating and Corporate Governance Committee did not meet during 2010.
  Item 14. Principal Accounting Fees and Services.
  Audit Fees
 BigString incurred fees of approximately $20,500 and $10,000 in 2010 and 2009, respectively, to Madsen & Associates CPAs, Inc. for audit services, which included work related to the audits rendered for the years ended December 31, 2010 and 2009. BigString also incurred fees of approximately $9,000 in 2009 to Wiener, Goodman & Company, P.C. for audit services.
  Audit Related Fees
 As of December 31, 2010, BigString has not paid any fees associated with audit related services to Madsen & Associates CPAs, Inc., Wiener, Goodman & Company, P.C., or any other accounting firm.
  Tax Fees
 As of December 31, 2010, BigString has not paid any fees associated with tax compliance, tax advice or tax planning to Madsen & Associates CPAs, Inc. or Wiener, Goodman & Company, P.C. BigString incurred fees of approximately $0 and $1,000 in 2010 and 2009, respectively, to an independent certified public accountant.
   23
 Index
   All Other Fees
 As of December 31, 2010, BigString has not paid any fees associated with non-audit services to Madsen & Associates CPAs, Inc., Wiener, Goodman & Company, P.C., or any other accounting firm.
  Policy on Pre-Approval of Audit and Permissible Non-Audit Services
 The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its Charter, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting firm. Such approval process ensures that the independent registered public accounting firm does not provide any non-audit services to BigString that are prohibited by law or regulation.
  Item 15. Exhibits and Financial Statement Schedules.
  (a)    Exhibits
 Reference is made to the Index of Exhibits beginning on page E-1 herein.
  (b)    Financial Statements
 Reference is made to the Index to Consolidated Financial Statements on page F-1.
  24
 Index
 
  SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  BIGSTRING CORPORATIONDate:  April 15, 2011
By:
/s/ Darin M. MymanDarin M. MymanPresident and Chief Executive Officer
 
 KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Darin M. Myman and Robert S. DeMeulemeester and each of them, his true and lawful attorneys-in-fact and agents for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue hereof.
  In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed by the following persons in the capacities and on the dates stated.
  Signatures

Title

Date/s/ Darin M. Myman

President and Chief Executive Officer and Director (Principal Executive Officer)

April 15, 2011Darin M. Myman/s/ Robert S. DeMeulemeester

Executive Vice President, Chief Financial Officer, Secretary and Treasurer

April 15, 2011Robert S. DeMeulemeester

and Director (Principal Financial and Accounting Officer)/s/ Adam M. Kotkin

Director

April 15, 2011Adam M. Kotkin
   25
 Index
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  BIGSTRING CORPORATION AND SUBSIDIARY
 (A Development Stage Company)
  Report of Independent Registered Public Accounting Firm
F-2Consolidated Balance Sheets at December 31, 2010 and 2009
F-3Consolidated Statement of Operations for the years ended December 31, 2010 and 2009,and the period October 8, 2003 (Date of Formation) through December 31, 2010
F-4Consolidated Statement of Stockholders’ Equity (Deficiency) for the years ended December 31, 2010 and 2009,and the period October 8, 2003 (Date of Formation) through December 31, 2010
F-5Consolidated Statement of Cash Flows for the years ended December 31, 2010 and 2009,and the period October 8, 2003 (Date of Formation) through December 31, 2010
F-6Notes to Consolidated Financial Statements
F-7
 
  F-1
 Index
 Madsen & Associates, CPA's Inc.
 684 East Vine Street
 Murray, UT 84107
  
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the Board of Directors and Stockholders of
 BigString Corporation
 Red Bank, New Jersey
 
 We have audited the accompanying consolidated balance sheet of BigString Corporation and Subsidiary (collectively, the “Company”) (a development stage company) as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ deficiency and cash flows for the years then ended and for the period October 8, 2003 (Date of Formation) through December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
  We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the periods ended December 31, 2010 and 2009 and for the period October 8, 2003 (Date of Formation) through December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
  The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As more fully explained in Note 2 to the Company's consolidated financial statements, the Company has a working capital deficit and has incurred losses since operations commenced. The Company's continued existence is dependent upon its ability to obtain working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses. These uncertainties raise substantial doubt about the Company's ability to continue as a going concern. The Company's financial statements do not include any adjustments that might result from the outcome of these uncertainties should the Company be unable to continue as a going concern.
   /s/ Madsen & Associates, CPAs Inc.
  April 13, 2011
 
 
 F-2
 Index
 
 BIGSTRING CORPORATION AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS
 (A DEVELOPMENT STAGE COMPANY)
 
  December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
15,225


$
3,039Accounts receivable - net of allowance of $25 and $35


1,888



4,290Prepaid expenses and other current assets


14,842



315,291Total current assets


31,955



322,620Property and equipment - net


13,731



39,393Other assets


-



80,817TOTAL ASSETS

$
45,686


$
442,830LIABILITIES AND STOCKHOLDERS' DEFICIENCYCurrent liabilities:Accounts payable

$
192,826


$
231,558Accrued expenses


262,119



437,158Unearned revenue


1,303



1,649Accrued interest


86,234



64,724Short-term debt


928,646



504,133Total current liabilities


1,471,128



1,239,222Long term liabilities:Long-term debt


-



618,473TOTAL LIABILITIES


1,471,128



1,857,695Stockholders' deficiency:Preferred stock, $0.0001 par value - authorized 1,000,000 shares; issued and outstanding 79,657 and 79,657 shares, respectively


8



8Common stock, $0.0001 par value - authorized 249,000,000 shares; issued and outstanding 98,640,640 and 63,329,761 shares, respectively


9,864



6,333Additional paid in capital


14,228,180



13,701,687Deficit accumulated during the development stage


(15,663,494
)


(15,122,893
)Total stockholders' deficiency


(1,425,442
)


(1,414,865
)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

$
45,686


$
442,830
  See notes to consolidated financial statements.
  F-3
 Index
 BIGSTRING CORPORATION AND SUBSIDIARY
 CONSOLIDATED STATEMENT OF OPERATIONS
 (A DEVELOPMENT STAGE COMPANY)
 
  PeriodOctober 8, 2003For the Years Ended


(Date of Formation)December 31,


Through2010


2009


December 31, 2010Operating revenues

$
69,201


$
82,700


$
281,055Operating expenses:Cost of revenues


46,622



62,163



611,026Research, development, sales, general and administrative


135,438



896,102



8,198,878Amortization of intangibles and impairment of assets


-



-



5,533,067Total operating expenses


182,060



958,265



14,342,971Loss from operations


(112,859
)


(875,565
)


(14,061,916
)Other income (expense):Interest income


45



68



72,702Interest expense


(92,680
)


(84,224
)


(289,989
)Other, net


(335,107
)


(319,235
)


(1,901,390
)Total other income (expenses)


(427,742
)


(403,391
)


(2,118,677
)Loss before provision for income tax benefit


(540,601
)


(1,278,956
)


(16,180,593
)Income tax benefit


-



310,108



997,099Net loss

$
(540,601
)

$
(968,848
)

$
(15,183,494
)Net loss per common share:Basic and diluted

$
(0.01
)

$
(0.02
)Weighted average common shares outstanding:Basic and diluted


79,516,732



56,986,811
  See notes to consolidated financial statements.
  F-4
 Index
   BIGSTRING CORPORATION AND SUBSIDIARY
 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
 (A DEVELOPMENT STAGE COMPANY)
 
 Preferred Stock


Common Stock


AdditionalNo. of





No. of





Paid-In


SubscriptionTotal


Shares


Amount


Shares


Amount


Capital


Receivable


DeficitBalance, October 8, 2003

$
-



-


$
-



-


$
-


$
-


$
-


$
-Issuance of common stock (at $.0001 per share)


-



-



-



21,210,000



2,121



(2,121
)


-



-Contribution of capital


45,000



-



-



-



-



45,000



-



-Sale of common stock (at $0.25 per share)


-



-



-



40,000



4



9,996



(10,000
)


-Net loss


(29,567
)


-



-



-



-



-



-



(29,567
)Balance, December 31, 2003


15,433



-



-



21,250,000



2,125



52,875



(10,000
)


(29,567
)Cash received from prior sale of common stock


10,000



-



-



-



-



-



10,000



-Sale of common stock (at $0.25 per share)


217,500



-



-



870,000



87



217,413



-



-Issuance of common stock for services (valued at $0.21 per share)


39,251



-



-



185,000



19



39,232



-



-Issuance of common stock for acquisition (valued at $0.24 per share)


4,800,000



-



-



20,000,000



2,000



4,798,000



-



-Issuance of warrants for services (valued at $0.07 per share)


3,500



-



-



-



-



3,500



-



-Net loss


(729,536
)


-



-



-



-



-



-



(729,536
)Balance, December 31, 2004


4,356,148



-



-



42,305,000



4,231



5,111,020



-



(759,103
)Sale of common stock (at $0.25 per share)


230,500



-



-



922,000



92



230,408



-



-Exercise of warrants (at $0.25 per share)


11,250



-



-



45,000



4



11,246



-



-Issuance of common stock for services (valued at $0.25 per share)


12,500



-



-



50,000



5



12,495



-



-Sale of common stock (at $0.16 per share)


1,511,700



-



-



9,448,125



945



1,510,755



-



-Issuance of warrants for services (valued at $0.07 per share)


179,200



-



-



-



-



179,200



-



-Net loss


(2,102,587
)


-



-



-



-



-



-



(2,102,587
)Balance, December 31, 2005


4,198,711



-



-



52,770,125



5,277



7,055,124



-



(2,861,690
)Redemption of shares from stockholders (at $0.05 per share)


(400,000
)


-



-



(8,000,000
)


(800
)


(399,200
)


-



-Issuance of common stock for consulting services (valued at $0.82 per share)


-



-



-



1,250,000



125



(125
)


-



-Stock-based compensation expense


314,250



-



-



-



-



314,250



-



-Issuance of warrants for consulting services (valued at $0.08, $0.18 and $0.42 per share)


36,595



-



-



-



-



36,595



-



-Issuance of common stock for website acquisition (valued at $0.80 per share)


600,000



-



-



750,000



75



599,925



-



-Sale of preferred stock (at $.0001 per share)


1,860,000



400,000



40



-



-



1,859,960



-



-Dividends from allocation of proceeds for the beneficial conversion feature of preferred stock


-



-



-



-



-



480,000



-



(480,000
)Exercise of warrants (at $0.16, $0.20 and $0.25 per share)


18,000



-



-



165,000



17



34,233



(16,250
)


-Net loss


(3,114,225
)


-



-



-



-



-



-



(3,114,225
)Balance, December 31, 2006


3,513,331



400,000



40



46,935,125



4,694



9,980,762



(16,250
)


(6,455,915
)
   Index
   Cash received from prior exercise of warrants


16,250



-



-



-



-



-



16,250



-Issuance of common stock for consulting services (valued at $0.50 and $0.33 per share)


-



-



-



432,000



43



(43
)


-



-Allocation to warrants from sale of convertible promissory notes and warrants


31,320



-



-



-



-



31,320



-



-Beneficial conversion feature of convertible promissory notes


666,648



-



-



-



-



666,648



-



-Issuance of common stock for conversion of convertible promissory notes (at $0.18 per share)


155,000



-



-



861,111



86



154,914



-



-Stock-based compensation expense


672,532



-



-



-



-



672,532



-



-Issuance of warrants, net (valued at $0.10 per share)


19,094



-



-



-







19,094



-



-Issuance of common stock for waiver and release (valued at $0.25 per share)


250,000



-



-



1,000,000



100



249,900



-



-Exercise of warrants (at $0.10 per share)


150,000



-



-



1,500,001



150



149,850



-



-Net loss


(3,949,184
)


-



-



-



-



-



-



(3,949,184
)Balance, December 31, 2007


1,524,991



400,000



40



50,728,237



5,073



11,924,977



-



(10,405,099
)Exercise of warrants (at $0.10 per share)


21,333



-



-



213,333



21



21,312



-



-Issuance of common stock for conversion of convertible promissory notes (at $0.18 per share)


20,000



-



-



111,111



11



19,989



-



-Allocation to warrants from sale of convertible promissory notes and warrants


76,176



-



-



-



-



76,176



-



-Beneficial conversion feature of convertible promissory notes


188,740



-



-



-



-



188,740



-



-Stock-based compensation expense


727,800



-



-



-



-



727,800



-



-Issuance of common stock for accrued interest (at $0.15 per share)


43,757



-



-



291,713



29



43,728



-



-Issuance of common stock for website acquisition (valued at $0.13 per share)


117,000



-



-



900,000



90



116,910



-



-Net loss


(3,748,946
)


-



-



-



-



-



-



(3, 748,946
)Balance, December 31, 2008


(1,029,149
)


400,000



40



52,244,394



5,224



13,119,632



-



(14,154,045
)Stock-based compensation expense


215,708



-



-



-



-



215,708



-



-Issuance of common stock for accrued interest (at $0.08 per share)


79,500



-



-



993,750



100



79,400



-



-Allocation to warrants from sale of convertible promissory notes and warrants


34,992



-



-



-



-



34,992



-



-Beneficial conversion feature of promissory notes


168,000



-



-



-



-



168,000



-



-Issuance of common stock for conversion of preferred stock


-



(320,343
)


(32
)


4,429,522



443



(411
)


-



-Issuance of common stock for conversion of promissory notes (at $0.015 per share)


84,932



-



-



5,662,095



566



84,366



-



-Net loss


(968,848
)


-



-



-



-



-



-



(968,848
)Balance, December 31, 2009


(1,414,865
)


79,657



8



63,329,761



6,333



13,701,687



-



(15,122,893
)Stock-based compensation expense


361



-



-



-



-



361



-



-Issuance of common stock for accrued interest (at $0.015 per share)


71,171



-



-



4,744,715



474



70,697



-



-Issuance of common stock for conversion of promissory notes (at $0.015 per share)


458,492



-



-



30,566,164



3,057



455,435



-



-Net loss


(540,601
)


-



-



-



-



-



-



(540,601
)Balance, December 31, 2010

$
(1,425,442
)


79,657


$
8



98,640,640


$
9,864


$
14,228,180


$
-


$
(15,663,494
)
 
 See notes to consolidated financial statements.
  F-5
 Index
 
 BIGSTRING CORPORATION AND SUBSIDIARY
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (A DEVELOPMENT STAGE COMPANY)
  PeriodOctober 8, 2003For the Years Ended


(Date of Formation)December 31,


Through2010


2009


December 31, 2010Cash flows from operating activities:Net loss

$
(540,601
)

$
(968,848
)

$
(15,183,494
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization of property and equipment, intangible and other assets


96,238



140,000



5,071,734Gain on sale of property and equipment


-



3,755



2,058Impairment of assets


-



-



1,042,876Accretion for beneficial conversion feature and discount on notes


264,532



337,706



1,132,946Stock-based compensation


361



215,708



2,201,697Other non-cash compensation


-



-



269,094Changes in operating assets and liabilities:Decrease (increase) in accounts receivable, net


2,402



10,825



(1,888
)Decrease (increase) in prepaid expenses and other assets


310,691



(330,920
)


(400,774
)(Decrease) increase in accounts payable


(38,732
)


(62,963
)


192,826(Decrease) increase in accrued expenses and other liabilities


(82,359
)


304,444



539,715(Decrease) increase in unearned revenue


(346
)


(5,455
)


1,303Net cash provided by (used in) operating activities


12,186



(355,748
)


(5,131,907
)Cash flows from investing activities:Purchase of property and equipment


-



-



(262,290
)Sale of property and equipment


-



-



50,889Acquisitions


-



-



(13,000
)Net cash provided by (used in) investing activities


-



-



(224,401
)Cash flows from financing activities:Proceeds from issuance of convertible notes and warrants


-



180,000



1,930,000Proceeds from issuance of preferred stock, net


-



-



1,860,000Proceeds from exercise of common stock warrants and issuance of common stock


-



-



2,231,533Payments for redemption of notes


-



-



(250,000
)Payments for redemption of common stock


-



-



(400,000
)Net cash provided by financing activities


-



180,000



5,371,533Net change in cash and cash equivalents


12,186



(175,748
)


15,225Cash and cash equivalents - beginning of year


3,039



178,787



-Cash and cash equivalents - end of year

$
15,225


$
3,039


$
15,225Supplementary information:Cash paid during the periods for:Interest

$
-


$
-


$
9,328Income taxes

$
-


$
-


$
-Acquisitions

$
-


$
-


$
13,000Details of acquisitions:Fair value of assets acquired

$
-


$
-


$
2,790Fair value of liabilities assumed


-



-



(5,857
)Intangibles


-



-



5,533,067Common stock issued to effect acquisition

$
-


$
-


$
5,517,000Non-cash transactions during the periods for:Conversion of promissory notes

$
458,492


$
84,932


$
718,424Issuance of common stock for accrued interest

$
71,171


$
79,500


$
194,427Stock-based compensation: Common stock

$
-


$
113,889


$
1,275,751Stock-based compensation: Common stock options


361



86,782



601,416Stock-based compensation: Common stock warrants


-



15,037



324,530Other non-cash compensation: Issue of warrants, net


-



-



19,094Other non-cash compensation: Issuance of common stock for waiver and release


-



-



250,000
 
 See notes to consolidated financial statements.
  F-6
 Index
 BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND THE PERIOD OCTOBER 8, 2003
 (DATE OF FORMATION) THROUGH DECEMBER 31, 2010
  NOTE 1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  ORGANIZATION
  BigString Corporation (the “Company” or “BigString”) was incorporated in the state of Delaware on October 8, 2003 under the name “Recall Mail Corporation.” The Company’s name was formally changed to “BigString Corporation” in July 2005. BigString was formed to develop technology that would allow the user of email services to have comprehensive control, security and privacy relating to the email generated by the user. In March 2004, the BigString email service was introduced to the market.
  BigString Interactive, Inc. (“BigString Interactive”), incorporated in the state of New Jersey, was formed by BigString in early 2006 to develop technology relating to interactive web portals.
  PeopleString Corporation (“PeopleString”), incorporated in the state of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. After purchases of PeopleString common stock by investors in April 2009, BigString owned less than 30% of PeopleString’s outstanding common stock at December 31, 2010.
  BigString is considered a development stage enterprise in accordance with the guidance contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities.” BigString has limited revenue to date, continues to raise capital and there is no assurance that ultimately BigString will achieve a profitable level of operations.
  PRINCIPLES OF CONSOLIDATION
  The consolidated financial statements include the accounts of BigString and its subsidiary, BigString Interactive, which is a wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated.
  USE OF ESTIMATES
  The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including but not limited to those related to such items as costs to complete performance contracts, income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
  RECLASSIFICATIONS
  Certain reclassifications have been made to prior period balances in order to conform to the current period’s presentation.
  CASH AND CASH EQUIVALENTS
  Cash equivalents include short-term investments in United States treasury bills and commercial paper with an original maturity of three months or less when purchased. At December 31, 2010 and December 31, 2009, cash and cash equivalents approximated $15,000 and $3,000, respectively.
  CERTAIN RISKS AND CONCENTRATION
  Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and accounts receivable.
  The Company places its temporary cash investments with quality financial institutions and commercial issuers of short term paper.
  F-7
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  The Company grants credit to customers based on an evaluation of the customer’s financial condition, sometimes without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company controls its exposure to credit risk through credit approvals, credit limits and monitoring procedures and establishes allowances for anticipated losses.
  REVENUE RECOGNITION
  BigString derives revenue from online services, electronic commerce, advertising and data network services. BigString also derives revenue from marketing affiliations. BigString recognizes revenue in accordance with the guidance contained in the ASC 605, “Revenue Recognition.”
  Consistent with the provisions of ASC 605-45-05, BigString generally recognizes revenue associated with its advertising and marketing affiliation programs on a gross basis due primarily to the following factors: BigString is the primary obligor; has latitude in establishing prices; has discretion in supplier selection; performs part of the service; and determines specifications.
  Consistent with ASC 605-50-15, BigString accounts for cash considerations given to customers, for which it does not receive a separately identifiable benefit or cannot reasonably estimate fair value, as a reduction of revenue rather than an expense. Accordingly, any corresponding distributions to customers are recorded as a reduction of gross revenue.
  BigString records its allowance for doubtful accounts based upon an assessment of various factors, including historical experience, age of the accounts receivable balances, the credit quality of customers, current economic conditions and other factors that may affect customers’ ability to pay. Allowances at December 31, 2010 and 2009 were $25 and $35, respectively.
  DEPRECIATION
  Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated primarily using the straight-line method over their estimated useful lives of these assets.
  RESEARCH AND DEVELOPMENT
  BigString accounts for research and development costs in accordance with accounting pronouncements, including ASC 730, “Research and Development” and ASC 985, “Software.” BigString has determined that technological feasibility for its software products is reached shortly before the products are released. Research and development costs incurred between the establishment of technological feasibility and product release have not been material and have accordingly been expensed when incurred.
  ADVERTISING
  Advertising costs incurred by the Company are expensed as incurred.
  EVALUATION OF LONG-LIVED ASSETS
  BigString reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. In accordance with the guidance provided in ASC 360-15-35, “Impairment or Disposal of Long-Lived Assets,” if the carrying value of the long-lived asset exceeds the estimated future undiscounted cash flows to be generated by such asset, the asset would be adjusted to its fair value and an impairment loss would be charged to operations in the period identified.
  INTANGIBLES
  ASC 350, “Goodwill and Other,” specifies the financial accounting and reporting for acquired goodwill and other indefinite life intangible assets. Goodwill and other indefinite-lived intangible assets are no longer amortized, but are reviewed for impairment at least annually.
  Other intangibles are tested annually for impairment. If events indicate that impairment could exist, a recoverability test is performed comparing future net cash flows from the asset to the carrying value of the asset. If the recoverability test indicates the asset is impaired and the asset carrying amount is greater than fair market value, an impairment charge adjusts the carrying value to fair market value.
  F-8
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  DEFERRED FINANCING COSTS
  Debt issue costs were deferred and amortized in other income (expense) over the terms of the related debts. BigString issued notes in June 2009, August 2008, February 2008 and May 2007 and incurred issuance costs of $33,552, $18,977, $91,706 and $248,939, respectively, which are being amortized over the term of the notes, and are included in other current assets. Amortization expense related to these costs is included in other, net in the consolidated statement of operations.
  INCOME TAXES
  BigString accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax basis of reported assets and liabilities. A valuation allowance reduces the deferred tax assets to the amount estimated more likely than not to be realized.
  The principal items giving rise to deferred taxes are timing differences between book and tax assets, other expenditures and a net operating loss carryforward.
  STOCK-BASED COMPENSATION
  BigString accounts for stock-based compensation under ASC 718, “Compensation-Stock Compensation.” The compensation cost for the portion of awards is based on the grant-date fair value of those awards as calculated for either recognition or pro forma disclosures under ASC 718.
  BigString issues shares of common stock to non-employees as stock-based compensation. BigString accounts for the services using the fair market value of the consideration issued, generally measured at the closing price of BigString’s common stock on the date of the agreement. For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded compensation expense of $0, $113,889 and $1,275,751, respectively, in connection with the issuance of shares of common stock to non-employees. For the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString also recorded $250,000 of other non-cash compensation expense for shares of common stock issued to non-employees.
  BigString has one stock-based compensation plan under which incentive and nonqualified stock options or rights to purchase stock may be granted to employees, directors and other eligible participants. The fair values of the stock options are estimated on the date of grant using the Black-Scholes option-pricing model. For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded compensation expense of $361, $86,782 and $601,416, respectively, in connection with the issuance of stock options. BigString did not grant stock options prior to 2006.
  BigString issues stock purchase warrants to non-employees as stock-based compensation. The fair values of the stock purchase warrants are estimated on the date of grant using the Black-Scholes option-pricing model. For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded compensation expense of $0, $15,037 and $324,530, respectively, in connection with the issuance of stock purchase warrants for services. For the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString also recorded $19,094 other non-cash compensation expense, net for the cancellation and issue of warrants.
  ACCOUNTING FOR DERIVATIVES
  BigString evaluates its options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815-15-10, “Hedging and Derivatives-Embedded Derivatives” and related interpretations including ASC 815-40-05, “Hedging and Derivatives-Contracts in Entity’s Own Equity.”
  BENEFICIAL CONVERSION FEATURE
  When debt or equity is issued which is convertible into common stock at a discount from the common stock market price at the date the debt or equity is issued, a beneficial conversion feature for the difference between the closing price and the conversion price multiplied by the number of shares issuable upon conversion is recognized. The beneficial conversion feature is presented as a discount to the related debt or a dividend to the related equity, with an offsetting amount increasing additional paid-in capital.
  F-9
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  EQUITY METHOD INVESTMENTS
  BigString accounts for non-marketable investments using the equity method of accounting if the investment gives it the ability to exercise significant influence over, but not control of, an investee. Significant influence generally exists if there is an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for additional investments and their proportionate share of earnings or losses and distributions. BigString records its share of the investee’s earnings or losses in earnings (losses) from unconsolidated entities, net of income taxes, in its consolidated statement of operations. Equity investments of less than 20% are stated at cost; the cost is not adjusted for its proportionate share of the earnings or losses. BigString evaluates its equity investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investments may have experienced an other-than-temporary decline in value. When evidence of a loss in value has occurred, BigString compares fair value of the investment to its carrying value to determine whether impairment has occurred. If the estimated fair value is less than the carrying value and management considers the decline to be other than temporary, the excess of the carrying value over the estimated fair value is recognized as impairment in the consolidated financial statements.
  NEW FINANCIAL ACCOUNTING STANDARDS
  The FASB has published an update to the accounting guidance on fair value measurements and disclosures as it relates to investments in certain entities that calculate net asset value per share (or its equivalent). This accounting guidance permits a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This update also requires new disclosures, by major category of investments, about the attributes of investments included within the scope of this update. The guidance in this update is effective for interim and annual periods ending after December 15, 2009. The adoption of this standard did not have a material impact on the Company’s results of operations, financial condition or cash flows.
  NOTE 2. GOING CONCERN
  For the year ended December 31, 2010, BigString’s consolidated financial statements reflect a net loss of $540,601, net cash provided by operations of $12,186, a working capital deficit of $1,439,173, a stockholders’ deficit accumulated during the development stage of $15,663,494 and a cumulative net loss of $15,183,494. These matters raise doubt about the ability of BigString to continue as a going concern. BigString’s consolidated financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern.
  The time required for BigString to become profitable is highly uncertain, and BigString can give no assurances that it will achieve or sustain profitability or generate sufficient cash flow from operations to meet planned capital expenditures, planned marketing expenditures and working capital requirements. If required, the ability to obtain additional financing from other sources also depends on many factors beyond BigString’s control, including the state of the capital markets and the prospects for BigString’s business. The necessary additional financing may not be available to BigString or may be available only on terms that would result in further dilution to the current stockholders of BigString.
  In March 2011, BigString sold 1,850,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $740,000. As of March 31, 2011, BigString owned 6,125,600 shares of PeopleString common stock, approximately 17.7% of the issued and outstanding shares.
  In April 2011, BigString sold 650,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $260,000. As of April 12, 2011, BigString owned 5,475,600 shares of PeopleString common stock, approximately 15.8% of the issued and outstanding shares.
  As a result of these sales of PeopleString common stock, BigString believes it has sufficient capital to fund operations for at least the next nine months.
  F-10
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3. EARNINGS (LOSS) PER COMMON SHARE
  Basic earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the specified period and after preferred stock dividend requirements. Diluted earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares and potential common shares outstanding during the specified period and after preferred stock dividend requirements. All potentially dilutive securities, which include convertible notes, outstanding preferred stock, warrants and options, have been excluded from the computation, as their effect is antidilutive.
  NOTE 4. FAIR VALUE MEASUREMENTS
  The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
  Level 1 - Observable inputs such as quoted market prices in active markets.
  Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable.
  Level 3- Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.
  As of December 31, 2010 and 2009, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents and investments. The fair value of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1. The fair value of BigString’s investment in PeopleString is determined based on the most recent private placement per share purchase price for PeopleString’s common stock and is categorized as Level 2. The Company does not have any financial assets measured at fair value on a recurring basis as Level 3 and there were no transfers in or out of Level 3 during the years ended December 31, 2010 and 2009.
  The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of December 31, 2010 and 2009:
  Assets at Fair Value at Period End, UsingQuoted Prices in Active Markets for Identical Assets


Significant Other

Observable Inputs


Significant Unobservable InputsAssets:

Total


(Level 1)


(Level 2)


(Level 3)December 31, 2010Cash and cash equivalents

$
15,225


$
15,225


$
-


$
-Investments


1,250,000



-



1,250,000



-$
1,265,225


$
15,225


$
1,250,000


$
-December 31, 2009Cash and cash equivalents

$
3,039


$
3,039


$
-


$
-Investments


1,250,000



-



1,250,000



-$
1,253,039


$
3,039


$
1,250,000


$
-
  There were no financial assets accounted for at fair value on a nonrecurring basis at December 31, 2010 and 2009.
  The Company has other financial instruments, such as receivables, accounts payable and other liabilities which have been excluded from the table above. Due to the short-term nature of these instruments, the carrying value of receivables, accounts payable and other liabilities approximate their fair values. The Company did not have any other financial instruments within the scope of the fair value disclosure requirements as of December 31, 2010 and 2009.
  F-11
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 5. ACQUISITIONS
  On July 9, 2008, BigString completed the acquisition of the website, BuddyStumbler, pursuant to an asset purchase agreement. BigString issued 900,000 shares of its common stock to the sellers. The market value of BigString’s common stock on July 9, 2008 was $0.13 per share. The purchase price of $117,000 has been allocated to intangible assets based on estimated fair value. The acquisition includes right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material.
  On December 11, 2006, BigString completed the acquisition of the website, DailyLOL, pursuant to an asset purchase agreement. The cash purchase price of $13,000 has been allocated to intangible assets based on estimated fair value. The acquisition includes right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material.
  On May 19, 2006, BigString completed the acquisition of certain assets, including two websites, from a principal of Lifeline Industries, Inc. In consideration for the assets, BigString issued 750,000 shares of BigString’s common stock. The market value of BigString’s common stock on May 19, 2006 was $0.80 per share. In conjunction with this acquisition, BigString acquired an intangible asset for $600,000 based on estimated fair value. The acquisition included right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material. Lifeline Industries, Inc. previously entered an agreement on May 2, 2006, to provide business consultant services to BigString for three years.
  On July 16, 2004, BigString completed the acquisition of Email Emissary. BigString purchased 100% of Email Emissary’s stock for 20,000,000 shares of BigString’s common stock. BigString acquired Email Emissary to consolidate its marketing and development operations. The purchase price of $4,800,000 was allocated to both tangible and intangible assets and liabilities based on estimated fair values. Approximately $4,803,000 of identifiable intangible assets (patent application, trademark and websites) arose from this transaction. Such intangible assets are being amortized on a straight-line basis over the estimated economic life of five years.
  This acquisition was accounted for using the purchase method of accounting, and accordingly, the results of operations of Email Emissary has been included in BigString’s consolidated financial statements from July 16, 2004, the date of closing.
  As of December 31, 2008, each of the intangible assets had been fully amortized and/or impaired.
  NOTE 6. PROPERTY AND EQUIPMENT
  Property and equipment consist of the following:
  December 31,2010


2009Computer equipment and internal software

$
159,313


$
159,313Furniture and fixtures


5,721



5,721165,034



165,034Less accumulated depreciation


151,303



125,641$
13,731


$
39,393
  Depreciation expense for the years ended December 31, 2010 and 2009, and for the period October 8, 2003 (Date of Formation) through December 31, 2010, was $25,663, $31,589 and $195,198, respectively.
  NOTE 7. GOODWILL AND OTHER INTANGIBLES
  Other intangibles consist of patent application and trademark, logos, source codes and websites. Amounts assigned to these intangibles have been determined by management. Management considered a number of factors in determining the allocations, including an independent formal appraisal. Other intangibles are being amortized over five years. Other intangible assets consist of the following:
  F-12
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   December 31,2010


2009Patent application and trademark

$
4,803,067


$
4,803,067Logos, websites and source codes


730,000



730,0005,533,067



5,533,067Impairment


(1,042,876
)


(1,042,876
)4,490,191



4,490,191Accumulated amortization


4,490,191



4,490,191$
-


$
-
  Amortization expense was $0, $0 and $4,490,191 for the years ended December 31, 2010 and 2009, and for the period October 8, 2003 (Date of Formation) through December 31, 2010, respectively.
  NOTE 8. INVESTMENTS
  Equity Investment:
  At March 31, 2009, BigString owned 100% of the common shares outstanding of PeopleString and the financial results of PeopleString were included in BigString’s consolidated financial statements at March 31, 2009. BigString owned 29% of PeopleString’s outstanding common stock at December 31, 2010, which had a fair market value of $1,250,000 based on the most recent private placement per share purchase price of PeopleString common stock. A consolidated balance sheet for PeopleString is as follows:
  December 31,2010


2009Assets

$
613,236


$
448,997Liabilities


312,641



201,046Stockholders' equity


300,595



247,951Total liabilities and stockholders' equity

$
613,236


$
448,997
 
  For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded losses of $0, $500 and $500, respectively, on the deconsolidation and equity investment method of its prior subsidiary, PeopleString. The loss is limited to BigString’s investment in PeopleString as BigString has no obligation to fund additional investments, and at December 31, 2010, the value of its equity investment was $0.
  Cost Method Investment:
  In April, 2009, BigString sold 15,000,000 shares of common stock in FindItAll, Inc. for $40,000 in a private transaction. The remaining $3,000 investment in FindItAll, Inc. continues to be held at cost in other current assets on BigString’s consolidated balance sheets.
  NOTE 9. OTHER, NET
  The components of other, net consist of gain on investments, other income, expenses related to the convertible debenture financings, preferred stock financing, warrant and common stock financings and loss (gain) on investments and are as follows:
  F-13
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  PeriodOctober 8, 2003(Date of Formation)Through2010


2009


December 31, 2010Gain on sale of investments

$
-


$
40,162


$
40,162Other income


-



86,720



86,720Amortization of debt issue costs


(70,575
)


(108,411
)


(385,932
)Amortization of promissory note discount


(49,437
)


(44,816
)


(135,859
)Amortization of beneficial conversion feature


(215,095
)


(292,890
)


(997,087
)Other financing expenses


-



-



(509,394
)$
(335,107
)

$
(319,235
)

$
(1,901,390
)
  Gain on sale of investment contains the transactions as discussed in Note 8. Other income contains the reversal of $66,079 of public relations expense and $20,641 of investor relations expense.
  Debt issue costs for the June 2009, August 2008, February 2008 and May 2007 convertible debenture financings were $33,552, $18,977, $91,706 and $248,939, respectively, and are being amortized over the term of the notes issued in each financing, which is 24, 5, 36 and 36 months, respectively. Amortization is accelerated for the proportion of promissory notes which are converted in a period.
  Other financing expenses include $250,000 of stock-based other non-cash compensation for the fair market value of common stock issued for a waiver and release related to the convertible debenture financing in 2007.
  NOTE 10. INCOME TAXES
  BigString applies the provisions of the ASC 740, “Income Taxes.” A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Valuation allowances as of December 31, 2010 have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as BigString may continue to incur losses.
  Components of deferred income tax assets are as follows:
  December 31,2010


2009Deferred tax assets - current

Tax Effect


Tax EffectBenefit due to loss carryforward

$
5,314,223


$
5,125,013Valuation allowance


(5,314,223
)


(5,125,013
)$
-


$
-
  The Company files income tax returns in all jurisdictions in which it has reason to believe it is subject to tax. The Company is subject to examination by various taxing jurisdictions. To date, there have been no examinations. Nonetheless, any tax jurisdiction may contend that a filing position claimed by the Company regarding one or more of its transactions is contrary to that jurisdiction’s laws or regulations. Significant judgment is required in determining the worldwide provisions for income taxes. In the ordinary course of business of a global business, the ultimate tax outcome is uncertain for many transactions. It is the Company’s policy to establish provisions for taxes that may become payable in future years as a result of an examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure associated with permanent tax differences and tax credits applied to temporary difference adjustments. The tax provisions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments to those provisions.
  BigString has participated in the state of New Jersey’s Corporation Business Tax Benefit Certificate Transfer program (the “Program”), which allows certain high technology and biotechnology companies to sell unused net operating loss (“NOL”) carryforwards to other New Jersey corporation business taxpayers. The Program requires that the purchaser pay at least 75% of the amount of the surrendered tax benefit. For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded a net state tax benefit of $0, $310,108 and $997,099, respectively, as a result of its sale of New Jersey state net operating losses and New Jersey state research and development credits. Since New Jersey law provides that net operating losses can be carried over for up to seven years, BigString may be able to transfer its unused New Jersey net operating losses in future years.
  At December 31, 2010, BigString has available NOL carry forwards of approximately $13.3 million for federal income tax reporting purposes and $1.9 million for state income tax reporting purposes which expire in various years through 2030. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s NOL and research credit carry forwards may be limited, and, as such, BigString’s NOL carry forwards available to offset future federal taxable income may be limited. Similarly, BigString may be restricted in using its research credit carry forwards to offset future federal income tax expense.
  F-14
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 11. DEBT
  On June 23, 2009, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP (collectively, the “2009 Subscribers”), pursuant to which the 2009 Subscribers purchased convertible notes in the aggregate principal amount of $180,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 6,000,000 shares of BigString's common stock, resulting in net proceeds of approximately $146,500 after transaction fees of approximately $33,500. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $35,000 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $168,000 was included as additional paid in capital based on the conversion discount.
  Each convertible note has a term of two years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.015 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.015 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.
  At December 31, 2010, the outstanding aggregate principal amount of these convertible notes was $75,000.
  In connection with the June 23, 2009 financing, BigString paid Whalehaven Capital Fund Limited $6,000, Alpha Capital Anstalt $6,000 and Excalibur Special Opportunities LP $2,400 for finder’s fees.
  As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price underlying the warrants previously issued by BigString in February 2008 and May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions. The 2007 Subscribers and 2008 Subscribers (as such terms are defined below) verbally agreed to waive anti-dilution provisions related to the number of shares of common stock underlying the warrants previously issued by BigString in February 2008 and May 2007.
  On August 25, 2008, BigString entered into a financing arrangement with Dwight Lane Capital, LLC, a limited liability company in which Todd M. Ross, a former director of BigString, has an interest, and Marc W. Dutton, a former director of BigString. In connection with such financing, BigString issued promissory notes in the aggregate principal amount of $250,000 and common stock purchase warrants to purchase up to an aggregate 800,000 shares of BigString's common stock. Each note had a term of five months and accrued interest at a rate of 12% annually. The warrants have an exercise price of $0.08 per share.
  BigString incurred transaction fees of approximately $19,000. BigString accounted for the convertible feature of the notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Due to the conversion rights only upon an event of default, $2,080 was included as additional paid in capital based on a weighted conversion discount. The warrants did not have a conversion discount, and accordingly, no proceeds were allocated to the warrants based on fair value, nor included as additional paid in capital.
  As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price and number of shares of common stock underlying the warrants previously issued by BigString in February 2008 and May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions.
  In December 2008, all amounts due under the notes were paid by BigString, including accrued interest of $9,328, and, as a result, the notes were cancelled.
  On February 29, 2008, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP (collectively, the “2008 Subscribers”), pursuant to which the 2008 Subscribers purchased convertible notes in the aggregate principal amount of $700,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 2,333,333 shares of BigString's common stock, resulting in net proceeds of approximately $608,000 after transaction fees of approximately $92,000. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $76,200 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $186,660 was included as additional paid in capital based on the conversion discount.
   F-15
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Each convertible note has a term of three years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.15 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.
  At December 31, 2010, the outstanding aggregate principal amount of these convertible notes was $594,076.
  In connection with the February 29, 2008 financing, BigString paid Gem Funding LLC $56,000 and issued a warrant to purchase 373,333 shares of BigString’s common stock to Gem Funding, LLC on February 29, 2008, which is similar to and carries the same rights as the warrants issued to the 2008 Subscribers.
  As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price and number of shares of common stock underlying the warrants previously issued by BigString in May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions.
  On May 1, 2007, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear (collectively, the “2007 Subscribers”), pursuant to which the 2007 Subscribers purchased convertible notes in the aggregate principal amount of $800,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 1,777,779 shares of BigString's common stock, resulting in net proceeds of approximately $551,000 after transaction fees of approximately $249,000. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $31,300 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $666,648 was included as additional paid in capital based on the conversion discount.
  Each convertible note has a term of three years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of BigString’s common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.30 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.
  At December 31, 2010, the outstanding aggregate principal amount of these convertible notes was $292,500.
  In connection with the May 1, 2007 financing, BigString paid Gem Funding LLC $64,000 and issued a warrant to purchase 213,333 shares of BigString’s common stock to Gem Funding LLC on May 1, 2007, which is similar to and carries the same rights as the warrants issued to the 2007 Subscribers.
  On November 30, 2007, BigString and the 2007 Subscribers entered into an Agreement, Waiver and Limited Release. As part of the Agreement, Waiver and Limited Release, the 2007 Subscribers released BigString from liquidated damages relating to the outstanding convertible notes. At the date of the Agreement, Waiver and Limited Release, BigString had accrued $24,267 in liquidated damages. BigString also granted the 2007 Subscribers 1,000,000 restricted shares of BigString’s common stock. BigString recorded $250,000 of stock-based other non-cash compensation expense related to the debt issue.
  For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, $458,492, $84,931 and $718,424 of the convertible notes were converted resulting in 30,566,164, 5,662,095 and 37,200,481 shares, respectively, of BigString’s common stock being issued to the holders of the convertible notes. Information regarding the convertible notes outstanding at December 31, 2010 and December 31, 2009 is as follows:
   F-16
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  December 31,2010


2009Convertible note, May 1, 2007, maturing  May 1, 2010

$
292,500


$
558,250Beneficial conversion feature


-



(51,692
)Note Discount


-



(2,425
)292,500



504,133Convertible note, February 29, 2008, maturing February 28, 2011


594,076



681,819Beneficial conversion feature


(8,801
)


(70,705
)Note Discount


(3,592
)


(28,855
)581,683



582,259Convertible note, June 23, 2009, maturing  June 23, 2011


75,000



180,000Beneficial conversion feature


(17,500
)


(119,000
)Note Discount


(3,037
)


(24,786
)54,463



36,214$
928,646


$
1,122,606
  For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString issued 4,744,715, 993,750 and 6,030,178 shares, respectively, of BigString’s common stock in lieu of $71,170, $79,500 and $194,427, respectively, of accrued interest. Future accrued interest payments, which may include shares of BigString’s common stock in lieu of accrued interest, on the May 1, 2007, February 29, 2008 and June 23, 2009 convertible notes are currently estimated as follows:
  AccruedYears Ending

InterestDecember 31,

Payments2011

$
76,986
 
  On May 1, 2010, the convertible notes issued by BigString on May 1, 2007 to each of Alpha Capital Anstalt, Iroquois Master Fund and Whalehaven Capital Fund Limited matured. As of December 31, 2010, BigString had not repaid such convertible notes and was in default thereunder. On November 5, 2010, the Company received a notice of default from Iroquois Capital Management, LLC demanding immediate repayment of the entire balance of the convertible note in cash plus all accrued and unpaid interest and penalties. Subsequently, Iroquois Capital Management, LLC verbally rescinded such demand.
  These outstanding notes are subject to a default rate of interest of 15% per annum and are included in the above future accrued interest payments.
  Change in Control
  Management believes that a change in control of BigString may occur in the future in the event one or more of Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP converts and exercises all or substantially all of the convertible notes and warrants to purchase shares of BigString’s common stock held by it or them.
  NOTE 12. COMMON STOCK
  On July 18, 2005, BigString amended its Certificate of Incorporation to, among other things, (1) change its name from Recall Mail Corporation to BigString Corporation, and (2) increase the number of shares BigString is authorized to issue from 50,000,000 shares to 250,000,000 shares, consisting of 249,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. The board of directors has the authority, without action by the stockholders, to designate and issue the shares of preferred stock in one or more series and to designate the rights, preference and privileges of each series, any or all of which may be greater than the rights of BigString’s common stock. Currently, there are 79,657 shares of preferred stock outstanding.
   F-17
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  In October 2003, the month of BigString’s formation, BigString issued 21,210,000 shares of its common stock to principals of BigString at no cost to such principals.
  During 2003, BigString concluded a private placement of securities, pursuant to which it sold 40,000 shares of BigString’s common stock at a per share purchase price of $0.25. BigString received $10,000 in gross proceeds as a result of this private placement.
  During 2004, BigString concluded a private placement of securities, pursuant to which it sold 870,000 shares of BigString’s common stock at a per share purchase price of $0.25. BigString received $217,500 in gross proceeds as a result of this private placement.
  During 2004, BigString issued 185,000 shares of common stock valued at $0.21 per share in consideration for consulting services provided by two marketing consultants. BigString recorded consulting expense of $39,251 in connection with the issuance of these shares. Fair market value was based on most recent private placement per share purchase price and an agreed upon per share purchase price discount.
  During 2004, BigString completed the acquisition of Email Emissary for 20,000,000 shares of BigString’s common stock for a purchase price of $4,800,000. Fair market value of $0.24 per share was based on the weighted average private placement per share purchase prices in 2003 and 2004.
  During 2005, BigString issued 50,000 shares of common stock valued at $0.25 per share for business advisory services. Fair market value was based on the concurrent private placement per share purchase price.
  For the year ended December 31, 2005, BigString concluded several private placements pursuant to which it sold 922,000 shares of its common stock at a per share purchase price of $0.25 and 9,448,125 shares of its common stock at a per share purchase price of $0.16. As a result of these private placements, BigString received $1,742,200 in gross proceeds.
  On May 2, 2006, BigString issued 1,250,000 shares of common stock in consideration for business consultant services to be provided by Lifeline Industries, Inc. The market value of BigString’s common stock at May 2, 2006 was $0.82 per share.
  On May 19, 2006, BigString completed the acquisition of certain assets, including two websites, from a principal of Lifeline Industries, Inc. In consideration for the assets, BigString issued 750,000 shares of common stock. The market value of BigString’s common stock at May 19, 2006 was $0.80 per share.
  Additionally, in May 2006, BigString redeemed 2,000,000 shares of its common stock from each of Charles A. Handshy, Jr. and David L. Daniels, former directors of BigString, and 2,000,000 shares of its common stock from each of their spouses, June E. Handshy and Deborah K. Daniels, at a purchase price of $0.05 per share.
  On February 26, 2007, BigString agreed to issue 140,000 shares of common stock to CEOcast, Inc. in consideration for investor relations services. The market value of BigString’s common stock at February 26, 2007 was $0.50 per share.
  Additionally, on February 26, 2007, BigString agreed to issue 192,000 shares of common stock to Howard Greene in consideration for public relations services provided by Greene Inc. Communications. The market value of BigString’s common stock at February 26, 2007 was $0.50 per share.
  On May 1, 2007, BigString issued 100,000 shares of common stock to Jonathan Bomser in consideration for online marketing services provided by CAC, Inc. The market value of BigString’s common stock at May 1, 2007 was $0.33 per share.
  On November 30, 2007, BigString agreed to issue 1,000,000 shares of its common stock to the 2007 Subscribers as part of the Agreement, Waiver and Limited Release. The market value of BigString’s common stock at November 30, 2007 was $0.25 per share.
  During November and December 2007, BigString issued an aggregate 861,111 shares of common stock for the conversion of convertible promissory notes totaling $155,000. The conversion price was $0.18 per share.
   F-18
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 On February 8, 2008, BigString issued 111,111 shares of its common stock upon the conversion of convertible promissory notes totaling $20,000. The conversion price was $0.18 per share.
  On May 1, 2008, BigString issued 291,713 shares of its common stock, at $0.15 per share, for accrued interest on convertible promissory notes totaling $43,757.
  On July 9, 2008, BigString completed the acquisition of certain assets and issued 900,000 shares of its common stock. The market value of BigString’s common stock at July 9, 2008 was $0.13 per share.
  On March 2, 2009, BigString issued 525,000 shares of its common stock, at $0.08 per share, for accrued interest on convertible promissory notes totaling $42,000.
  On May 1, 2009, BigString issued 468,750 shares of its common stock, at $0.08 per share, for accrued interest on convertible promissory notes totaling $37,500.
  On July 1, 2009, BigString issued 4,429,522 shares of its common stock upon the conversion of 320,343 shares of Series A Preferred Stock, par value $0.0001 per share.
  On July 15, 2009, BigString issued 1,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $15,000. The conversion price was $0.015 per share.
  On July 27, 2009, BigString issued 500,000 shares of its common stock upon the conversion of convertible promissory notes totaling $7,500. The conversion price was $0.015 per share.
  On August 31, 2009, BigString issued 480,552 shares of its common stock upon the conversion of convertible promissory notes totaling $7,208. The conversion price was $0.015 per share.
  On September 30, 2009, BigString issued 2,950,000 shares of its common stock upon the conversion of convertible promissory notes totaling $44,250. The conversion price was $0.015 per share.
  On October 13, 2009, BigString issued 731,543 shares of its common stock upon the conversion of convertible promissory notes totaling $10,973. The conversion price was $0.015 per share.
  On March 5, 2010, BigString issued 2,768,555 shares of its common stock, at $0.015 per share, for accrued interest on convertible promissory notes totaling $41,528.
  On April 28, 2010, BigString issued 2,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $30,000. The conversion price was $0.015 per share.
  On May 6, 2010, BigString issued 2,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $30,000. The conversion price was $0.015 per share.
  On May 21, 2010, BigString issued 4,833,333 shares of its common stock upon the conversion of convertible promissory notes totaling $72,500. The conversion price was $0.015 per share.
  On May 21, 2010, BigString issued 956,593 shares of its common stock, at $0.015 per share, for accrued interest on convertible promissory notes totaling $14,348.
  On May 24, 2010, BigString issued 2,333,333 shares of its common stock upon the conversion of convertible promissory notes totaling $35,000. The conversion price was $0.015 per share.
  On May 28, 2010, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000. The conversion price was $0.015 per share.
  On June 2, 2010, BigString issued 1,333,333 shares of its common stock upon the conversion of convertible promissory notes totaling $20,000. The conversion price was $0.015 per share.
  On July 8, 2010, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000. The conversion price was $0.015 per share.
  On September 22, 2010, BigString issued 2,216,667 shares of its common stock upon the conversion of convertible promissory notes totaling $33,250. The conversion price was $0.015 per share.
  On September 29, 2010, BigString issued 3,849,498 shares of its common stock upon the conversion of convertible promissory notes totaling $57,742. The conversion price was $0.015 per share.
   F-19
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  On November 19, 2010, BigString issued 977,167 shares of its common stock, at $0.015 per share, for accrued interest on convertible promissory notes totaling $14,658.
  On November 16, 2010, BigString issued 1,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $15,000. The conversion price was $0.015 per share.
  On November 22, 2010, BigString issued 2,500,000 shares of its common stock upon the conversion of convertible promissory notes totaling $37,500. The conversion price was $0.015 per share.
  On December 23, 2010, BigString issued 2,500,000 shares of its common stock upon the conversion of convertible promissory notes totaling $37,500. The conversion price was $0.015 per share.
  On December 23, 2010, BigString issued 42,400 shares of its common stock, at $0.015 per share, for accrued interest on convertible promissory notes totaling $636.
  NOTE 13. PREFERRED STOCK
  On May 19, 2006, BigString issued a total of 400,000 shares of Series A Preferred Stock, par value $0.0001 per share, and warrants to purchase 1,000,000 shares of its common stock to Witches Rock Portfolio Ltd.,The Tudor BVI Global Portfolio Ltd.andTudor Proprietary Trading, L.L.C., for an aggregate purchase price of $2,000,000. The shares of Series A Preferred Stock are convertible under certain circumstances into shares of BigString’s common stock, and have certain dividend, voting, liquidation and conversion rights. The warrants are convertible into shares of BigString’s common stock at an exercise price per share of $1.25, as adjusted. BigString has registered the shares of common stock issuable upon conversion of the shares of Series A Preferred Stock and the shares of common stock underlying the warrants. In conjunction with this transaction, BigString incurred a fee of $140,000, which is included in additional paid in capital.
  BigString accounted for the convertible preferred stock under ASC 815-15-10, and related interpretations including ASC 815-40-05. BigString performed calculations allocating the proceeds of the Series A Preferred Stock with detachable warrants to each respective security at their fair values. The value of the warrants of $400,000 was recorded as a reduction of the Series A Preferred Stock and credited to additional paid-in-capital. The recorded discount of $480,000 resulting from allocation of proceeds to the beneficial conversion feature is analogous to a dividend and is recognized as a return to the preferred stockholders at the date of issuance of the convertible preferred stock.
  On July 1, 2009, BigString issued 4,429,522 shares of its common stock upon the conversion of 320,343 shares of Series A Preferred Stock, par value $0.0001 per share.
  NOTE 14. SHARE-BASED COMPENSATION
  Warrants:
  During 2004, BigString granted warrants as payment for advisory services. The warrants provided for the purchase of 60,000 shares of BigString’s common stock at an exercise price of $0.25. Certain of these warrants were exercised in 2005, which resulted in 45,000 shares of BigString’s common stock being issued to the holders thereof. As a result of these exercises, BigString received $11,250 in gross proceeds. The remainder of these warrants was exercised in 2006, which resulted in 15,000 shares of BigString’s common stock being issued to the holder thereof. As a result of this exercise, BigString recorded a subscription receivable of $3,750. In connection with the grant of these warrants, BigString recorded an expense of $3,500 which is included in BigString’s consolidated statement of operations for the year ended December 31, 2004. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.
  On January 1, 2005, BigString granted warrants to two consultants as payment for advisory services. Each warrant provided for the purchase of 50,000 shares of BigString’s common stock at an exercise price of $0.25 per share. One of the warrants was exercised in 2006, which resulted in 50,000 shares of BigString’s common stock being issued to the holder thereof. As a result of this exercise, BigString recorded a subscription receivable of $12,500. In addition, the other warrant providing for the purchase of 50,000 shares of BigString’s common stock expired on January 1, 2007. In connection with the grant of these warrants, BigString recorded an expense of $7,400 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2005. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.
  F-20
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  On September 23, 2005, BigString granted warrants to a consultant, as payment for advisory services. One warrant provides for the purchase of 1,246,707 shares of BigString’s common stock with a per share exercise price of $0.16, and the second warrant provides for the purchase of 1,196,838 shares of BigString’s common stock with a per share exercise price of $0.20. A portion of each warrant, representing 50,000 shares of common stock, was assigned to a third party. The assigned portions of the warrants were exercised in 2006, which resulted in 100,000 shares of BigString’s common stock being issued to the holder thereof. As a result of these exercises, BigString received $18,000 in gross proceeds. The remainder of each of these warrants expired on September 23, 2010. In connection with the grant of these warrants, BigString recorded an expense of $171,800 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2005. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.
  On May 2, 2006, BigString granted warrants to purchase shares of BigString’s common stock in consideration for business consultant services to be provided by Lifeline Industries, Inc. A total of $135,300 of the deferred compensation in connection with the warrants has been expensed over a period of 36 months. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.42 and $0.18 per share.
  On December 1, 2006, BigString granted warrants to two consultants, as payment for advisory services. Each warrant provides for the purchase of 50,000 shares of BigString’s common stock at an exercise price of $0.50 per share. Each of these warrants is due to expire on December 1, 2011. In connection with the grant of these warrants, BigString recorded an expense of $6,530 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2006. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 4%; and expected life of 3 years. The weighted average fair value of these warrants was $0.08 per share.
  As discussed in Note 11, on May 1, 2007, BigString granted warrants to purchase up to 1,991,112 shares of BigString's common stock to the 2007 Subscribers and Gem Funding LLC. Each of the warrants has a term of five years from May 1, 2007 and was fully vested on the date of issuance. The warrants are exercisable at $0.30 per share of common stock, as adjusted. A total of $31,320 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value.
  In November 2007, BigString repriced warrants to purchase 1,713,334 shares of common stock previously issued to the 2007 Subscribers, which warrants were subsequently exercised by the 2007 Subscribers at the reduced exercise price. The exercise price of the repriced warrants was reduced from $0.30 per share to $0.10 per share. As a result of this repricing, the warrants with an exercise price of $0.30 per share were deemed cancelled and new warrants with an exercise price of $0.10 per share were deemed issued. In December 2007, five repriced warrants were exercised at the exercise price of $0.10 per share, which resulted in 1,500,001 shares of BigString’s common stock being issued to the holders thereof. As a result of these exercises, BigString received $150,000 in gross proceeds. In addition, one repriced warrant was exercised in January 2008 at the exercise price of $0.10 per share, which resulted in 213,333 shares of BigString’s common stock being issued to the holder thereof and $21,333 in gross proceeds to BigString. The fair value of the warrants deemed cancelled and deemed issued was estimated on the date of approval by the board of directors of BigString using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0% and 0%; expected volatility of 69% and 69%; risk free rate of return of 4% and 3%; and expected life of 4 and 0 years for the deemed cancellation and deemed issue of warrants, respectively. The weighted average fair value of the deemed cancellation and deemed issue of warrants was $0.11 per share and $0.12 per share, respectively. BigString expensed the net fair value of $19,094 for the year ended December 31, 2007.
   F-21
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  As discussed in Note 11, on February 29, 2008, BigString granted warrants to purchase up to 2,706,666 shares of BigString's common stock to the 2008 Subscribers and Gem Funding LLC. Each of the warrants has a term of five years from February 29, 2008 and was fully vested on the date of issuance. The warrants are exercisable at $0.15 per share of common stock, as adjusted. A total of $76,176 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers and Gem Funding LLC were adjusted.
  As discussed in Note 11, on August 25, 2008, BigString granted warrants to purchase up to 800,000 shares of BigString's common stock to Dwight Lane Capital, LLC and Marc W. Dutton. Each of the warrants has a term of ten years from August 25, 2008 and was fully vested on the date of issuance. The warrants are exercisable at $0.08 per share of common stock. The warrants did not have a conversion discount, and accordingly, no proceeds for the convertible notes and warrants was allocated to the warrants, based on fair value, nor included as additional paid in capital. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers, the 2008 Subscribers and Gem Funding LLC were adjusted.
  As discussed in Note 11, on June 23, 2009, BigString granted warrants to purchase up to 6,000,000 shares of BigString's common stock to the 2009 Subscribers. Each of the warrants has a term of five years from June 23, 2009 and was fully vested on the date of issuance. The warrants are exercisable at $0.015 per share of common stock, as adjusted. A total of $34,992 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers, the 2008 Subscribers and Gem Funding LLC were adjusted.
  Information regarding the warrants outstanding, all of which are exercisable, for 2010 and 2009 is as follows:
  WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term


ValueWarrants outstanding at January 1, 2009


10,393,545


$
0.25Warrants granted


11,700,000


$
0.02Warrants exercised


-


$
-Warrants cancelled/forfeited/expired


(5,700,000
)

$
0.08Warrants outstanding at December 31, 2009


16,393,545


$
0.14



3.7


$
58,500Warrants granted


-


$
-Warrants exercised


-


$
-Warrants cancelled/forfeited/expired


(2,343,545
)

$
0.18Warrants outstanding at December 31, 2010


14,050,000


$
0.13



3.2


$
175,500Warrants exercisable at December 31, 2009


16,393,545


$
0.14



3.7


$
58,500Warrants exercisable at December 31, 2010


14,050,000


$
0.13



3.2


$
175,500
  The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock prices of BigString’s common stock on December 31, 2009 and 2010 and the exercise prices for in-the-money warrants) that would have been received by the warrant holders if all in-the-money warrants had been exercised on December 31, 2009 and 2010, respectively.
  Warrants granted during the years ended December 31, 2010 and 2009 were 0 and 11,700,000, respectively. For the period October 8, 2003 (Date of Formation) through December 31, 2010, warrants to purchase a total of 28,764,657 shares of BigString’s common stock were granted. The weighted average grant date fair values of warrants granted in the years ended December 31, 2010 and 2009 were $0.00 and $0.02, respectively.
  Warrants exercised during the years ended December 31, 2010 and 2009 were 0 and 0, respectively. Cash received during the years ended December 31, 2010 and 2009 from the exercise of warrants was $0 and $0, respectively. The total intrinsic value of warrants exercised in the years ended December 31, 2010 and 2009 was $0 and $0, respectively. For the period October 8, 2003 (Date of Formation) through December 31, 2010, a total of 1,923,334 shares of BigString’s common stock were purchased upon the exercise of warrants.
  F-22
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  During the years ended December 31, 2010 and 2009, 2,343,545 warrants expired and 5,700,000 warrants were cancelled, respectively. During the period October 8, 2003 (Date of Formation) through December 31, 2010, warrants to purchase a total of 2,393,545 shares of BigString’s common stock expired with an aggregate intrinsic value of $26,000 at the date of expiration. In addition for the period October 8, 2003 (Date of Formation) through December 31, 2010, warrants to purchase a total of 10,397,778 shares of common stock were cancelled with an aggregate intrinsic value of $0 at the date of cancellation.
  Equity Incentive Plan and Stock Options Issued to Consultants:
  At the 2006 annual meeting of stockholders of BigString, the BigString Corporation 2006 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted and approved by a majority of BigString’s stockholders. Under the Equity Incentive Plan, incentive and nonqualified stock options and rights to purchase BigString’s common stock may be granted to eligible participants. Options are generally priced to be at least 100% of the fair market value of BigString’s common stock at the date of the grant. Options are generally granted for a term of five or ten years. Options granted under the Equity Incentive Plan generally vest between one and five years.
  On July 11, 2006, BigString approved the grant of a non-qualified stock option to purchase 575,100 shares of BigString’s common stock to a vendor. The non-qualified stock option has a term of five years from July 11, 2006 and an exercise price of $0.32 per share. For the year ended December 31, 2006, BigString recorded a consulting expense of $47,775 in connection with the contractual relationship between Kieran Vogel and BigString related to Mr. Vogel’s participation in BigString’s OurPrisoner program. These stock options were granted outside of the Equity Incentive Plan.
  On July 11, 2006, BigString granted incentive stock options to purchase 2,620,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options to purchase 1,450,000 shares of BigString’s common stock were granted at an exercise price of $0.32 per underlying share with 25% vesting every three months for one year, and incentive stock options to purchase 1,170,000 shares of BigString’s common stock were granted at an exercise price of $0.50 per underlying share with vesting over periods of three and four years. In addition, non-qualified stock options to purchase 600,000 shares of BigString’s common stock were granted to two non-employee directors at an exercise price of $0.50 per underlying share with vesting over a period of three years.
  On September 18, 2006, BigString granted an incentive stock option to purchase 1,800,000 shares of BigString’s common stock under its Equity Incentive Plan to a new BigString officer. 400,000 shares of BigString’s common stock are eligible for purchase at the per share price equal to $0.24; 600,000 shares of BigString’s common stock are eligible for purchase at $0.50 per share; 400,000 shares of BigString’s common stock are eligible for purchase at $.90 per share; and 400,000 shares of BigString’s common stock are eligible for purchase at $1.25 per share. The incentive stock option vested quarterly over a three year period.
  On November 14, 2007, BigString granted incentive stock options to purchase 1,275,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options were granted at an exercise price of $0.18 per underlying share with 25% vesting every three months for one year. In addition, non-qualified stock options to purchase 800,000 shares of BigString’s common stock were granted to three non-employee directors at an exercise price of $0.18 per underlying share with 25% vesting every three months for one year; these options were forfeited.
  On January 14, 2008, BigString granted incentive stock options to purchase 800,000 shares of BigString’s common stock under its Equity Incentive Plan to a new BigString employee. Incentive stock options were granted at an exercise price of $0.22 per underlying share with 25% vesting every three months for one year. These options were forfeited.
  On April 11, 2008, BigString granted incentive stock options to purchase 2,580,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options were granted at an exercise price of $0.21 per underlying share with 25% vesting every three months for one year. In addition, non-qualified stock options to purchase 1,000,000 shares of BigString’s common stock were granted to two non-employee directors at an exercise price of $0.21 per underlying share with 25% vesting every three months for one year; these options were forfeited.
  F-23
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  On October 13, 2008, BigString granted incentive stock options to purchase 300,000 shares of BigString’s common stock under its Equity Incentive Plan to a BigString employee. Incentive stock options were granted at an exercise price of $0.10 per underlying share with 25% vesting every three months for one year. These options were forfeited.
  On November 17, 2008, BigString granted non-qualified stock options to purchase 300,000 shares of BigString’s common stock to a BigString vendor under a partnering arrangement. The stock options were granted at an exercise price of $0.08 per underlying share with 25% vesting every three months for one year. These stock options were granted outside of the Equity Incentive Plan.
  For the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, BigString recorded stock-based option compensation expense of $361, $86,782 and $601,416, respectively. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense was recorded net of estimated forfeitures.
  Information regarding the stock options outstanding during the years ended December 31, 2010 and 2009 is as follows:
  WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term


ValueOptions outstanding at January 1, 2009


9,950,100


$
0.33Options granted


-


$
-Options exercised


-


$
-Options cancelled/forfeited/expired


(800,000
)

$
0.31Options outstanding at December 31, 2009


9,150,100


$
0.33



4.7


$
-Options granted


-


$
-Options exercised


-


$
-Options cancelled/forfeited/expired


(2,200,000
)

$
0.26Options outstanding at December 31, 2010


6,950,100


$
0.36



3.4


$
-Options exercisable at December 31, 2009


9,137,600


$
0.33



4.7


$
-Options exercisable at December 31, 2010


6,950,100


$
0.36



3.4


$
-
  The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock prices of BigString’s common stock on December 31, 2010 and 2009 and the exercise prices for in-the-money options) that would have been received by the option holders if all in-the-money warrants had been exercised on December 31, 2010 and 2009, respectively.
  Options granted during the years ended December 31, 2010 and 2009 were 0 and 0, respectively. For the period October 8, 2003 (Date of Formation) through December 31, 2010, options to purchase a total of 12,650,100 shares of BigString’s common stock were granted. The weighted average grant date fair value of options granted in the years ended December 31, 2010 and 2009 was $0.00 and $0.00, respectively.
  No options were exercised, and no cash received from option exercises and purchases of shares for the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010. The total tax benefit attributable to options exercised in the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010 was $0.
  During the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010, options to purchase a total of 2,200,000, 800,000 and 5,700,000 shares of BigString’s common stock were cancelled, forfeited or expired with an aggregate intrinsic value of $0 at the date of expiration.
  The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model, consistent with the provisions of ASC 718. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. BigString has limited relevant historical information to support the expected exercise behavior because BigString’s common stock has been publicly traded only since May 1, 2006.
  F-24
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted in the periods presented:
  PeriodOctober 8, 2003Years Ended

(Date of Formation)December 31,

Through2010

2009

December 31, 2010Risk-free interest rate


-
%


-
%


3.52
%Expected volatility


-
%


-
%


67
%Expected life (in years)


-



-



2.0Dividend yield


-



-



-
  The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of the grant. BigString estimates the volatility of its common stock at the date of the grant based on historical volatility, expected volatility and publicly traded peer companies. The expected life of stock options granted under the Equity Incentive Plan is based on management judgment, historical experience and publicly traded peer companies. BigString has no history or expectations of paying cash dividends on its common stock.
  NOTE 15. RELATED PARTY TRANSACTIONS
  On August 25, 2008, BigString entered into a financing arrangement with Dwight Lane Capital, LLC, a limited liability company in which Todd M. Ross, a former director of BigString, has an interest, and Marc W. Dutton, a former director of BigString, as discussed in Note 11.
  On December 29, 2008, BigString signed an agreement with Digital BobKat, LLC, a limited liability company in which Robert S. DeMeulemeester, an officer and director of BigString, has an interest, to provide business consulting services, including, but not limited to, management, product development, marketing, research, advertising and general business and administrative procedures and processes. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Payments are due monthly and are based on fair market value of the services provided, similar to the terms of a transaction with an unrelated party. Expenses for the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010 were $78,436, $30,000 and $120,436, respectively.
  On April 2, 2009, PeopleString entered into a verbal agreement with BigString, a related party, to license BigString’s messaging technology and share the cost of certain common services. At December 31, 2010, BigString was a significant, non-majority stockholder of PeopleString’s common stock. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Under the agreement, BigString provides messaging services to PeopleString users. The licensing fee was based on BigString’s experience providing services to other third parties and was determined by BigString’s management. Based on volume, BigString charges PeopleString fees that are higher in aggregate than BigString charges other third parties for outsourced messaging services. For the years ended December 31, 2010 and 2009, the amount incurred by PeopleString for the licensing was $42,000 and $33,000, respectively.
  Shared services costs are quantified based on management’s estimate of the percentage of time devoted to each company. Payments are due quarterly. In 2009, the shared services included hosting, insurance, rent, payroll and miscellaneous general and administrative expenses, and were primarily paid by BigString. In 2010, the shared services included hosting, insurance, rent and miscellaneous general and administrative expenses, and were primarily paid by PeopleString by year-end. For the years ended December 31, 2010 and 2009, the amount expensed to BigString by PeopleString for the shared expense was $5,403 and $132,340, respectively. PeopleString’s management determined, in their sole discretion, based on their subjective estimate of the amount of time devoted to each company, the amount incurred and paid for the shared services that is allocated to PeopleString.
   F-25
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  On June 1, 2009, BigString entered into a verbal agreement with Craig Myman, the brother of Darin M. Myman, President and Chief Executive Officer and a director of BigString, to provide business consulting services. Expenses for the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010 were $0, $2,300 and $2,300, respectively.
  NOTE 16. COMMITMENTS AND CONTINGENCIES
  Leases:
  BigString leases its facilities which requires BigString to pay certain executory costs (such as insurance and maintenance). Future minimum lease payments for operating leases are approximately as follows:
  MinimumYears Ending

LeaseDecember 31,

Payments2011


32,9202012


5,487$
38,407
  Rental expense, excluding shared service costs, was $18,832, $25,700 and $239,640 for the years ended December 31, 2010 and 2009, and for the period October 8, 2003 (Date of Formation) through December 31, 2010, respectively.
  Computer co-location, power and Internet access expense, including shared service costs, was $15,322, $27,745 and $224,949 for the years ended December 31, 2010 and 2009, and for the period October 8, 2003 (Date of Formation) through December 31, 2010, respectively.
  Consulting Agreements:
  On January 27, 2004, BigString entered into an agreement with Greene Inc. Communications to provide public relations services. In consideration for services performed, BigString agreed to issue to Howard Greene 140,000 shares of common stock in April, 2005 and 192,000 shares of common stock in February, 2007. Total public relation expenses, including the services of Greene Inc. Communications, for the years ended December 31, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through December 31, 2010 were $0, $2,315 and $304,113, respectively.
  On May 2, 2006, BigString signed a three-year business consultant services agreement with Lifeline Industries, Inc. In consideration for the services to be performed under the agreement, BigString issued to Lifeline Industries, Inc. (1) 1,250,000 shares of common stock, (2) a fully vested, five year warrant to purchase 225,000 shares of common stock at a per share purchase price of $0.48, and (3) a fully vested, five year warrant to purchase 225,000shares of common stock at a per share purchase price of $1.00. BigString incurred corresponding consulting expenses of $0, $128,926 and $1,160,300 for the years ended December 31, 2010 and 2009 and for the period October 8, 2003 (Date of Formation) through December 31, 2010, respectively.
  On November 17, 2008, BigString signed an agreement with Bruce Van Heel to provide sales consulting services. Expenses for the years ended December 31, 2010 and 2009 and for the period October 8, 2003 (Date of Formation) through December 31, 2010 were $0, $11,463 and $12,163, respectively.
  On July 1, 2009, BigString entered into a verbal agreement with Robb Knie to provide business consulting services. Expenses for the years ended December 31, 2010 and 2009 and for the period October 8, 2003 (Date of Formation) through December 31, 2010 were $0, $21,000 and $21,000, respectively.
  Marketing Affiliate Commitments:
  In connection with contracts to provide email services to marketing affiliates, BigString may be obligated to make payments, which may represent a portion of net advertising revenues, to its marketing affiliates. As of December 31, 2010 and 2009, and for the period October 8, 2003 (Date of Formation) through December 31, 2010, these commitments were not material.
  F-26
 Index
  BIGSTRING CORPORATION AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Other Commitments:
  In the ordinary course of business, BigString may provide indemnifications to customers, vendors, lessors, marketing affiliates, directors, officers and other parties with respect to certain matters. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and unique circumstances involved in each agreement. To date, the Company has not incurred material costs as a result of obligation under these agreements and has not accrued any liabilities related to such agreements.
  NOTE17. SUBSEQUENT EVENTS
  On January 25, 2011, BigString sold 24,400 shares of PeopleString’s common stock through a broker under a trading plan that allows the seller to diversify holdings of securities. The common stock was registered in PeopleString’s S-1 Registration Statement, as amended, which became effective September 17, 2010.
  On January 31, 2011, BigString entered into a separate Agreement and Release (each an “Agreement and Release”) with each of Alpha Capital Anstalt (“Alpha”) and Whalehaven Capital Fund Limited (“Whalehaven”). Each of Alpha and Whalehaven is the holder of certain convertible notes previously issued to each of them by BigString (collectively the “Notes”), which Notes are convertible into shares of BigString’s common stock, and certain warrants to acquire shares of common stock previously issued to each of them by BigString (collectively, the “Warrants”). Pursuant to the terms of each Agreement and Release, Alpha and Whalehaven have each agreed to forfeit the Warrants held by each of them to BigString for cancellation and to enter into amendments to each of the Notes held by each of them whereby the term of each Note will be extended by two (2) years. In addition, Alpha and Whalehaven have each agreed to release any claims they each had or may have had against BigString through the date of their respective Agreement and Release. In consideration of the foregoing, BigString has transferred 500,000 shares of PeopleString common stock to Alpha and 1,500,000 shares of PeopleString common stock to Whalehaven.
  In March 2011, BigString sold 1,850,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was valued at $0.40 per share and BigString received $740,000. As of March 31, 2011, BigString owned 6,125,600 shares of PeopleString common stock, approximately 17.7% of the issued and outstanding shares.
  In April 2011, BigString sold 650,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received $260,000. As of April 12, 2011, BigString owned 5,475,600 shares of PeopleString common stock, approximately 15.8% of the issued and outstanding shares.
  
 F-27
 Index
  INDEX OF EXHIBITS
  Exhibit No.

Description of Exhibit3.1.1

Certificate of Incorporation of BigString, placed into effect on October 8, 2003, incorporated by reference to Exhibit 3.1.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.3.1.2

Certificate of Amendment to the Certificate of Incorporation of BigString, placed into effect on July 19, 2005, incorporated by reference to Exhibit 3.1.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.3.1.3

Certificate of Designations of Series A Preferred Stock, par value $0.0001 per share, of BigString, incorporated by reference to Exhibit 3.1.3 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.3.2

Amended and Restated By-laws of BigString, incorporated by reference to Exhibit 3.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.4.1

Specimen certificate representing BigString’s common stock, par value $0.0001 per share, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.4.2

Form of Convertible Note, dated May 1, 2007, issued to the following entities and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); Chestnut Ridge Partners LP ($125,000); Iroquois Master Fund Ltd. ($125,000); and Penn Footwear ($50,000), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.4.3

Form of Convertible Note, dated February 29, 2008, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); and Excalibur Small Cap Opportunities LP ($200,000), incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.4.4

Form of Convertible Note, dated June 29, 2009, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($75,000); Alpha Capital Anstalt ($75,000); and Excalibur Special Opportunities LP ($30,000), incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.4.5

Amendments to convertible notes, dated as of January 31, 2011, by and among BigString and Alpha Capital Anstalt and Whalehaven Capital Fund Limited, incorporated by reference to Exhibits 4i, 4ii, 4iii, 4iv, 4v, and 4vi to the Current Report on Form 8-K filed with the SEC on February 4, 2011.10.1

Lease between BigString, as Tenant, and Walter Zimmerer & Son, as Landlord, dated February 3, 2009, for the premises located at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701, incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed with the SEC on March 31, 2009.10.2

Securities Purchase Agreement, dated as of May 19, 2006, by and among BigString andWitches Rock Portfolio Ltd.,The Tudor BVI Global Portfolio Ltd.andTudor Proprietary Trading, L.L.C., including Schedule 1 – Schedule of Purchasers, and Exhibit C – Form of Warrant. Upon the request of the SEC, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 2-3.2(d) – Warrants; Schedule 2-3.3 – Registration Rights; Schedule 2-3.7 – Financial Statements; Schedule 2-3.10 – Broker’s or Finder’s Fees; Schedule 2-3.11 – Litigation; Schedule 2-3.16 – Intellectual Property Claims Against the Company; Schedule 2-3.17 – Subsidiaries; Schedule 2-3.19(a) – Employee Benefit Plans; Schedule 2-3.22 – Material Changes; Exhibit A – Form of Certificate of Designations of the Series A Preferred Stock; Exhibit B – Form of Registration Rights Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion, incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.10.3

Registration Rights Agreement, dated as of May 19, 2006, by and among BigString andWitches Rock Portfolio Ltd.,The Tudor BVI Global Portfolio Ltd.andTudor Proprietary Trading, L.L.C., incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
   E-1
 Index
  10.4

Letter Agreement, dated September 18, 2006, between BigString and Robert S. DeMeulemeester, incorporated by reference to Exhibit 10.41 to the Current Report on Form 8-K filed with the SEC on September 21, 2006.10.5

BigString Corporation 2006 Equity Incentive Plan, incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.10.6

Form of Incentive Option Agreement (Employees), incorporated by reference to Exhibit 10.42.1 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.10.7

Form of Director Option Agreement (Non-employee Directors), incorporated by reference to Exhibit 10.42.2 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.10.8

Subscription Agreement, dated as of April 30, 2007, by and amongBigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear, includingExhibit B– Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits:Schedule 5(a)– Subsidiaries;Schedule 5(d)– Additional Issuances/Capitalization;Schedule 5(f)– Conflicts;Schedule 5(q)– Undisclosed Liabilities;Schedule 5(v)– Transfer Agent;Schedule 8– Finder’s Fee;Schedule 9(s)– Lockup Agreement Providers;Schedule 11.1(iv)– Additional Securities to be Included in the Registration Statement;Exhibit A– Form of Convertible Note (included as Exhibit 4.2);Exhibit C– Form of Escrow Agreement;Exhibit D– Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion;Exhibit E– Proposed Public Announcement; andExhibit F– Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.10.9

Agreement, Waiver and Limited Release, dated as of November 30, 2007, by and among BigString and the Releasors, incorporated by reference to Exhibit 10.37 to the Current Report on Form 8-K filed with the SEC on December 5, 2007.10.10

Subscription Agreement, dated as of February 29, 2008, by and among BigString andWhalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.44 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.10.11

Subscription Agreement, dated as of June 29, 2009, by and among BigString andWhalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.45 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.10.12

Agreement and Release, dated as of January 31, 2011, by and among BigString and Alpha Capital Anstalt and Whalehaven Capital Fund Limited, incorporated by reference to Exhibits 10i and 10ii to the Current Report on Form 8-K filed with the SEC on February 4, 2011.21.1

Subsidiaries of BigString.23.1

Consent of Madsen & Associates CPAs, Inc., independent registered public accountants, as to the report relating to the consolidated financial statements of BigString.24.1

Powers of Attorney of officers and directors of BigString, included in the signature page to this report.31.1

Section 302 Certification of Chief Executive Officer.31.2

Section 302 Certification of Chief Financial Officer.32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
  
 E-2