Table
      of Contents




U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





[X]
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the period ended March 31, 2007





[  
                ]
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the transition period from _______ to
                _______





Commission
      File No. 000-50560





UPSNAP,
      INC.


(Exact
      name of small business issuer as specified in its charter)








Nevada
              (State
                or other jurisdiction of
              incorporation
                or organization)
            20-0118697
              (IRS
                Employer identification No.)




134
      Jackson Street, Suite 203, P.O. Box 2399, Davidson, North Carolina
      20836


----------------------------------------------------------------------------------------------------------------


(Address
      of Principal Executive Offices)





(704)
      895-4121


-----------------------------------------------------------------------------


(Issuer’s
      Telephone Number)







Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes [x] No [  ]





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








State
      the
      number of shares outstanding of each of the issuers’ classes of common equity,
      as of the latest practicable date:





Class
      of Stock         Outstanding
      May 5, 2007


Common
      Stock ($.001 par value)        22,170,324








Transitional
      Small Business Disclosure Format (Check one):  Yes [  ] No [X]




Table
          of Contents


UPSNAP,
      INC.


FORM
      10-QSB





For
      the
      Quarter ended March 31, 2007





TABLEOF
      CONTENTS





Page


PART
                I - FINANCIAL INFORMATIONITEM
                1.
            Selected
                Financial StatementsBalance
                Sheet - March 31, 2007
                (unaudited)
            2Statements
                of Operations - Three Months
                Ended March 31, 2007 and 2006 (unaudited)
            3Statements
                of Stockholders’ Equity -
                (unaudited)
            4Statements
                of Cash Flows - Three months Ended
                March 31, 2007 and 2005 (unaudited)
            5Notes
                to Financial Statements
                (unaudited)
            6ITEM
                2.
            Management’s
                Discussion and
                Analysis
            16ITEM
                3.
            Controls
                and Procedures
            22PART
                II - OTHER INFORMATIONITEM
                2
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            22ITEM
                5.
            Other
                Information
            23ITEM
                6.
            Exhibits
            23Signatures




1
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          of Contents




**PARTI
–
      FINANCIAL
      INFORMATION**




**ITEM1. 
FINANCIAL
      STATEMENTS**




**UPSNAP,
                Inc.**CONSOLIDATED
                BALANCE SHEETAS
                OF MARCH 31, 2007UNAUDITEDASSETSCurrent
                AssetsCash
            
            $
            245,017Accounts
                receivable
            
            
            173,139Other
                current assets
            
            
            17,472TOTAL
                CURRENT ASSETS
            
            
            435,628PROPERTY
&
                EQUIPMENT (Note H)Computer
                and office
                equipment
            
            
            171,565Accumulated
                Depreciation
            
            
            (67,353
            )NET
                PROPERTY &
                EQUIPMENT
            
            
            104,212OTHER
                ASSETSOther
                intangibles (Note L)
            
            
            902,507Goodwill
                (Note L)
            
            
            4,677,862Security
                deposits
            
            
            1,114TOTAL
                ASSETS
            
            $
            6,121,323LIABILITIES
                & STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESAccounts
                payable
            
            $
            74,965Total
                Other Current Liabilities
            
            
            28,605TOTAL
                CURRENT
                LIABILITIES
            
            
            103,570LONG
                TERM LIABILITIESNote
                Payable (Note K)
            
            
            113,500TOTAL
                LIABILITIES
            
            
            217,070Commitments
                (Note I)STOCKHOLDERS'
                EQUITY (Note C and D)Common
                stock, par value $0.001, 97,500,000 authorized,
            
            
            22,170issued
                and outstanding 22,170,324 shares at March 31, 2007Additional
                paid-in capital
            
            
            8,560,233Accumulated
                deficit
            
            
            (2,678,150
            )TOTAL
                STOCKHOLDERS'
                EQUITY
            
            
            5,904,254TOTAL
                LIABILITIES & STOCKHOLDERS' EQUITY
            
            $
            6,121,323




The
        accompanying
        notes are an integral part of these unaudited financial statements
   2
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            of Contents




**UPSNAP,
                  INC.**CONSOLIDATED
                  STATEMENTS OF OPERATIONSFOR
                  THE THREE AND SIX MONTHS ENDED MARCH 31, 2007 AND 2006UNAUDITED**Three
                    Months Ended March 31,**
              
              **Six
                  Months Ended March 31,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**SALES
                  AND COST OF SALESAdvertising
                  Revenue
              
              $
              4,704
              
              $
              -
              
              $
              8,216
              
              $
              -Revenue
                  Share
              
              
              225,124
              
              
              244,042
              
              
              471,149
              
              
              244,042Other
              
              
              -
              
              
              -
              
              
              1,032
              
              
              -Total
                  Sales
              
              
              229,827
              
              
              244,042
              
              
              480,397
              
              
              244,042Cost
                  of
                  Sales
              
              
              100,122
              
              
              136,996
              
              
              227,278
              
              
              133,466Gross
                  Profit
              
              
              129,706
              
              
              107,046
              
              
              253,119
              
              
              110,576OPERATING
                  EXPENSESProduct
                  development
              
              
              89,223
              
              
              113,211
              
              
              175,298
              
              
              169,153Sales
                  and marketing expenses
              
              
              8,928
              
              
              57,856
              
              
              37,804
              
              
              104,531General
                  and administrative
              
              
              270,682
              
              
              288,325
              
              
              718,024
              
              
              546,815Total
                  Expense
              
              
              368,833
              
              
              459,393
              
              
              931,127
              
              
              820,499Net
                  operating income
              
              
              (268,711
              )
              
              (322,396
              )
              
              (703,849
              )
              
              (687,033
              )Other
                  income and expenseInterest
                  income
              
              
              1
              
              
              4,890
              
              
              127
              
              
              4,890Interest
                  expense
              
              
              -
              
              
              -
              
              
              -
              
              
              300Net
                  Other Income
              
              
              1
              
              
              4,890
              
              
              127
              
              
              4,590NET
                  LOSS
              
              $
              (268,711
              )
              $
              (317,506
              )
              $
              (703,722
              )
              $
              (682,443
              )Net
                  loss per share
              
              $
              (0.01
              )
              $
              (0.02
              )
              $
              (0.03
              )
              $
              (0.04
              )Weighted
                  average common shares outstanding:Basic
                  and diluted
              
              
              21,683,468
              
              
              20,993,802
              
              
              21,414,472
              
              
              16,396,022The
                  average shares listed below were notincluded
                  in the computation of diluted lossesper
                  share because to do so would have beenantidilutive
                  for the periods presented:Warrants:
              
              
              4,612,524
              
              
              5,144,668
              
              
              4,881,520
              
              
              3,858,501




The
        accompanying
        notes are an integral part of these unaudited financial statements
  3
 Table
            of Contents




**UPSNAP,
                  INC.**CONSOLIDATED
                  STATEMENT OF STOCKHOLDER'S EQUITYFOR
                  THE PERIOD SEPTEMBER 30, 2004 to MARCH 31, 2007UNAUDITEDCommon
                    StockTotalAdditional
              
              
              
              
              
              Stockholders'Paid-in
              
              
              Accumulated
              
              
              EquityShares
              
              
              Par
                  Value
              
              
              capital
              
              
              Deficit
              
              
              (Deficit)**Balances,
                  September 30, 2004**
              
              
              -
              
              $
              -
              
              $
              27,474
              
              $
              (27,474
              )
              $
              -Donated
                  capital
              
              
              -
              
              
              -
              
              
              119,525
              
              
              -
              
              
              119,525Shares
                  issued for cash ($.0003 per share)
              
              
              12,999,999
              
              
              1,300
              
              
              1,700
              
              
              -
              
              
              3,000Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (158,586
              )
              
              (158,586
              )**Balances,
                  September 30, 2005**
              
              
              12,999,999
              
              
              1,300
              
              
              148,699
              
              
              (186,060
              )
              
              (36,061
              )Shares
                  issued in connection with reverse merger
              
              
              5,788,495
              
              
              17,488
              
              
              2,079,623
              
              
              -
              
              
              2,097,112Shares
                  issued in connection with XSVoice acquisition
              
              
              2,362,830
              
              
              2,363
              
              
              5,997,712
              
              
              -
              
              
              6,000,074Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (1,788,368
              )
              
              (1,788,368
              )**Balances,
                  September 30, 2006**
              
              
              21,151,324
              
              
              21,151
              
              
              8,226,034
              
              
              (1,974,428
              )
              
              6,272,757Stock
                  based compensation
              
              
              -
              
              
              -
              
              
              80,468
              
              
              -
              
              
              80,468Exercise
                  of Series A Warrants
              
              
              1,019,000
              
              
              1,019
              
              
              253,731
              
              
              
              
              
              254,750Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (703,722
              )
              
              (703,722
              )**Balances,
                  March 31, 2007**
              
              
              22,170,324
              
              
              22,170
              
              $
              8,560,233
              
              $
              (2,678,150
              )
              $
              5,904,254




The
        accompanying notes are an integral part of these unaudited financial
        statements




4
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          of Contents








**UPSNAP,
                INC.**CONSOLIDATED
                STATEMENTS OF CASH FLOWSFOR
                THE SIX MONTH PERIODS ENDED MARCH 31, 2007 AND 2006UNAUDITEDMarch
                31, 2007
            
            
            March
                31, 2006CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (703,722
            )
            $
            (682,443
            )Adjustments
                to
                reconcile net lossto
                net
                cash used by operating activities:Depreciation
            
            
            25,140
            
            
            8,470Amortization
                of intangibles
            
            
            256,963
            
            
            17,767Changes
                to goodwill
            
            
            -
            
            
            (36,408
            )Stock
                based compensation
            
            
            80,468
            
            
            -CHANGES
                IN CURRENT ASSETS AND CURRENTLIABILITIES:
                (Net of effect of acquisition)Accounts
                receivable
            
            
            (4,312
            )
            
            (38,801
            )Other
                current assets
            
            
            (6,529
            )
            
            (29,833
            )Deposits
            
            
            -
            
            
            (1,115
            )Accounts
                payable and accrued expenses
            
            
            (48,460
            )
            
            122,255Other
                current
                liabilities
            
            
            15,181
            
            
            (16,200
            )NET
                CASH USED FOR OPERATING ACTIVITIES
            
            
            (385,270
            )
            
            (656,308
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Cash
                to
                acquire XSVoice, Inc.
            
            
            -
            
            
            (243,241
            )Cash
                received from the company merger
            
            
            -
            
            
            1,919,662Purchase
                of
                equipment
            
            
            (5,258
            )
            
            (131,087
            )NET
                CASH PROVIDED BY INVESTING ACTIVITIES
            
            
            (5,258
            )
            
            1,545,334CASH
                FLOWS FROM FINANCING ACTIVITIES:Exercise
                of
                warrants
            
            
            254,750
            
            
            -NET
                CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            254,750
            
            
            -NET
                INCREASE IN CASH
            
            
            (135,778
            )
            
            889,026CASH,
                beginning of period
            
            
            380,796
            
            
            175,611CASH,
                end of period
            
            $
            245,017
            
            $
            1,064,637Taxes
                paid
            
            $
            -
            
            $
            -Interest
                paid
            
            $
            -
            
            $
            -Other
                non-cash investing and financing activities:Shares
                issued in connection with reverse merger
            
            $
            -
            
            $
            2,097,112Shares
                issued in connection with XSVoice acquisition
            
            $
            -
            
            $
            6,000,074




The
        accompanying notes are an integral part of these unaudited financial
        statements




5
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          of Contents





**NOTESTO
      CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




NOTE
      A
      - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
      of Presentation





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      conformity with Generally Accepted Accounting Principles (“GAAP”) for interim
      financial information and with the instructions to SEC Form 10-QSB and Item
      310
      of Regulation S-B. Accordingly, they do not include all of the information
      and
      footnotes required by GAAP for complete financial statements. In preparing
      the
      financial statements, management is required to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the balance sheet and the
      reported amounts of revenues and expenses for the period. Actual results could
      differ significantly from those estimates. The accompanying unaudited
      consolidated financial statements should be read in conjunction with the audited
      consolidated financial statements and the notes thereto incorporated by
      reference in the Company’s Annual Report on SEC Form 10-KSB for the year ended
      September 30, 2006.





In
      the
      opinion of the Company’s management, the accompanying unaudited consolidated
      financial statements contain all material adjustments required by GAAP to
      present fairly the financial position of UPSNAP, INC. and its subsidiaries
      as of
      March 31, 2007 and the results of their operations for the six month periods
      ended March 31, 2007 and 2006 and their cash flows for the six months ended
      March 31, 2007 and 2006. All such adjustments are of a normal recurring nature,
      unless otherwise disclosed in this Form 10-QSB or other referenced
      material. Results of operations for interim periods are not necessarily
      indicative of results for the full year.





When
      required, certain reclassifications are made to the prior period’s consolidated
      financial statements to conform to the current presentation.





As
      of
      January 1, 2006 the Company exited the development stage company as defined
      in
      Financial Accounting Statements Board (“FASB”) Statement No. 7, *Accounting
      and Reporting for Development Stage Companies.*





Organization





In
      November, 2005, UpSNAP, Inc. (formerly Manu Forti Group) completed an
      acquisition of UpSNAP USA, Inc. The acquisition was accounted for as a
      recapitalization effected by a reverse merger, wherein UpSNAP USA, Inc. is
      considered the acquirer for accounting and financial reporting purposes
      (collectively, UpSNAP, Inc. and UpSNAP USA, Inc are referred to hereinafter
      as
      the “Company”). The pre-merger assets and liabilities of the acquired entity
      have been brought forward at their book value and no goodwill has been
      recognized. The accumulated deficit of UpSNAP USA, Inc. has been brought
      forward, and common stock and additional paid-in-capital of the combined company
      have been retroactively restated.





Pursuant
      to a definitive share exchange agreement dated November 15, 2005 (as previously
      filed on SEC Form 8-k on November 16, 2005), UpSNAP, Inc. acquired 100% of
      the
      issued and outstanding shares of UpSNAP USA, Inc.


Under
      the
      terms of the agreement UpSNAP, Inc. issued 11,730,000 shares of its common
      stock
      for all of the issued and outstanding stock of UpSNAP USA, Inc. As a result
      of
      the acquisition, the former shareholders of UpSNAP USA, Inc. held immediately
      after the acquisition 62.4% of the issued and outstanding shares of UpSNAP,
      Inc.'s common stock. The remaining 37.8% were held by UpSNAP, Inc.’s (formerly
      Manu Forti Group, Inc.) shareholders.





On
      January 6, 2006, the Company completed the purchase of XSVoice, Inc., a
      privately held wireless platform and application developer, by acquiring
      substantially all of the assets of XSVoice, Inc. for a total purchase price
      of
      $6.3 million. XSVoice, Inc.’s results of operations have been included in the
      consolidated financial statements since the date of acquisition (See Note
      L).





The
      consolidated financial statements include the operations of UpSNAP, Inc. from
      November 15, 2005 through March 31, 2007.





UpSNAP,
      Inc. changed its year-end to September 30 to coincide with the year-end of
      UPSNAP USA, Inc.




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NOTE
      B
      - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





These
      financial statements have been prepared by management in accordance with GAAP.
      The significant accounting principles are as follows:





Principles
      of consolidation





The
      consolidated financial statements include the accounts of UpSNAP, Inc. since
      November 15, 2005 and its wholly-owned subsidiary, UpSNAP USA, Inc., which
      is
      100% consolidated in the financial statements, and the accounts and results
      from
      operations acquired as a result of the XSVoice, Inc. acquisition as of January
      6, 2006. All material inter-company accounts and transactions have been
      eliminated.





Use
      of
      Estimates





The
      preparation of financial statements in conformity with GAAP requires management
      to make estimates and assumptions that affect the amounts reported in the
      financial statements and the accompanying notes. These estimates and assumptions
      are based on management's judgment and available information and, consequently,
      actual results could be different from these estimates.





Cash
      and cash equivalents





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      debt instruments purchased with an original maturity of three months or less
      to
      be cash equivalents.





Property
      and equipment





Property
      and equipment are stated at cost. Major renewals and improvements are charged
      to
      the asset accounts while replacements, maintenance and repairs, which do not
      improve or extend the lives of the respective assets, are expensed. At the
      time
      property and equipment are retired or otherwise disposed of, the asset and
      related accumulated depreciation accounts are relieved of the applicable
      amounts. Gains or losses from retirements or sales are credited or charged
      to
      income.





The
      Company depreciates its property and equipment on the double declining balance
      method with a five year life and half year convention.





Disclosure
      about Fair Value of Financial Instruments





The
      Company estimates that the fair value of all financial instruments at March
      31,
      2007, as defined in FASB 107, does not differ materially from the aggregate
      carrying values of its financial instruments recorded in the accompanying
      balance sheet. The estimated fair value amounts have been determined by the
      Company using available market information and appropriate valuation
      methodologies. Considerable judgment is required in interpreting market data
      to
      develop the estimates of fair value, and accordingly, the estimates are not
      necessarily indicative of the amounts that the Company could realize in a
      current market exchange.





Research
      and Development Expenditures





The
      Company incurs product development expenses related to the ongoing development
      of their search engine technology and connecting new clients to the existing
      streaming audio platform. Research and development expenses consist primarily
      of
      wages paid to employees and to independent contractors. The Company follows
      the
      guidelines in Statement of Financial Accounting Standards No. 2, *Accounting
      for Research and Development Costs* .
      Expenditures, including equipment used in research and development activities,
      are expensed as incurred.




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Revenue
      Recognition





The
      Company recognizes revenue under the guidance provided by the SEC Staff
      Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” and the Emerging
      Issues Task Force (“EITF”) Abstract No. 99-19 “Reporting Revenue Gross as a
      Principal versus Net as an Agent” (“EITF 99-19”).





The
      Company receives revenue from the wireless carriers by providing streaming
      audio
      content that the carriers make available to their mobile handset customers. UpSNAP
      generates revenues from this line of business in two distinct ways:





1.
            Provider
                of Technology Platform: UpSNAP provides technology to brands that
                have
                their own mobile distribution and revenue arrangements with the carriers.
                In this case, UpSNAP does not act as the principal in the transaction.
                The
                brands - typically large brands such as NASCAR or ESPN, have their
                own
                relationships with the carriers and look to UpSNAP to provide the
                technology platform and service, while they retain the relationship
                with
                the consumer and set the pricing. In these cases, UpSNAP typically
                reports
                net revenues received from the carrier which are revenues after both
                carrier charges and content provider charges.





The
      Company negotiated a new contract with its largest carrier customer effective
      February 12, 2007 in which the carrier is no longer deducting content provider
      charges before submitting revenue to the Company. Under this arrangement, the
      content provider charges are the responsibility of the Company. The net effect
      of this new contract is that revenues and cost of revenues are increased by
      an
      identical amount to reflect the content provider charges.





2.
            UpSNAP
                is Principal Party: UpSNAP acts as the principal party in the content
                relationships. Specifically, UpSNAP has the relationship with the
                carriers, sets the re-sale price at which consumers buy the product,
                pays
                the content provider for the content, and builds the mobile application
                or
                service. In these relationships, the Company recognizes revenue based
                on
                the gross fees remitted by the carrier to the company.The Company’s payments to the third party content providers are treated as
                cost of sales.




The
      Company also receives advertising revenues from third parties. These revenues
      are resultant from audio ads played on the Company’s SWInG platform, banner ads
      on the WAP deck, and pay per call revenues when the consumer proactively
      responds to a text message. These advertising revenues are recognized in the
      period the transactions are recorded by the third party provider.




Dividends





The
      Company has not yet adopted any policy regarding payment of dividends. No
      dividends have been paid or declared since inception.





Long-lived
      assets





The
      Company reviews the carrying value of property, plant, and equipment for
      impairment whenever events and circumstances indicate that the carrying value
      of
      an asset may not be recoverable from the estimated future cash flows expected
      to
      result from its use and eventual disposition. In cases where undiscounted
      expected future cash flows are less than the carrying value, an impairment
      loss
      is recognized equal to an amount by which the carrying value exceeds the fair
      value of assets. The factors considered by management in performing this
      assessment include current operating results, trends and prospects, the manner
      in which the property is used, and the effects of obsolescence, demand,
      competition, and other economic factors.





Accounting
      Policy for Impairment of Intangible Assets





The
      Company evaluates the recoverability of identifiable intangible assets whenever
      events or changes in circumstances indicate that an intangible asset’s carrying
      amount may not be recoverable. Such circumstances could include, but are not
      limited to: (1) a significant decrease in the market value of an asset, (2)
      a
      significant adverse change in the extent or manner in which an asset is used,
      or
      (3) an accumulation of costs significantly in excess of the amount originally
      expected for the acquisition of an asset. The Company measures the carrying
      amount of the asset against the estimated undiscounted future cash flows
      associated with it. Should the sum of the expected future net cash flows be
      less
      than the carrying value of the asset being evaluated, an impairment loss would
      be recognized. The impairment loss would be calculated as the amount by
      which




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the
      carrying value of the asset exceeds its fair value. The fair value is measured
      based on quoted market prices, if available. If quoted market prices are not
      available, the estimate of fair value is based on various valuation techniques,
      including the discounted value of estimated future cash flows. The evaluation
      of
      asset impairment requires the Company to make assumptions about future cash
      flows over the life of the asset being evaluated. These assumptions require
      significant judgment and actual results may differ from assumed and estimated
      amounts.




Segment
      reporting





T he
      Company follows Statement of Financial Accounting Standards No. 130, Disclosures
      About Segments of an Enterprise and Related Information. The Company operates
      as
      a single segment and will evaluate additional segment disclosure requirements
      as
      it expands its operations.





Advertising
      costs





The
      Company expenses all advertising as incurred. For the six month periods ended
      March 31, 2007 and 2006 the Company incurred advertising expense of $3,758
      and
      $10,053 respectively.





Stock-Based
      Compensation




Under
      the
      fair value recognition provisions of SFAS No. 123(R), stock-based
      compensation cost is estimated at the grant date based on the fair value of
      the
      award and is recognized as expense over the requisite service period of the
      award. We use the Black-Scholes option valuation model to value option awards
      under SFAS No. 123(R). The Company currently has awards outstanding with
      only service conditions and graded-vesting features. We recognize compensation
      cost on a straight-line basis over the requisite service period.




Our
      statement of operations for the six months ended March 31, 2007 and 2006
      included stock-based compensation expense of $80,468 and $0, respectively.




Unrecognized
      stock-based compensation expense expected to be recognized over an estimated
      weighted-average amortization period of 41.5 months was approximately $460,280
      at March 31, 2007.




Stock
      Plan




On
      November 2, 2006 the Board of Directors of UpSNAP, Inc. approved a 2006 Omnibus
      Stock and Incentive Plan. The Plan will make four million (4,000,000) shares,
      either unissued or reacquired by the Company, available for awards of either
      options, stock appreciation rights, restricted stocks, other stock grants,
      or
      any combination thereof. Eligible recipients include employees, officers,
      consultants, advisors and directors. Options granted generally have a ten-year
      term and vest over four years from the date of grant. Certain of the stock
      options granted under the Plan have been granted pursuant to various stock
      option agreements. Each stock option agreement contains specific
      terms.




Time-Based
      Stock Awards




The
      fair
      value of each time-based award is estimated on the date of grant using the
      Black-Scholes option valuation model, which uses the assumptions described
      below. Our weighted-average assumptions used in the Black-Scholes valuation
      model for equity awards with time-based vesting provisions granted during the
      six months ended March 31, 2007 are shown in the following table:




Expected
                  volatility
              70.%Expected
                  dividends
              0%Expected
                  terms
              6.0
                  - 6.25 yearsRisk
                  free interest rate
              4.45%
                  - 4.76%




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The
      expected volatility rate was estimated based on historical volatility of the
      Company’s common stock over approximately the fourteen month period since the
      reverse merger and comparison to the volatility of similar size companies in
      the
      similar industry. The expected term was estimated based on a simplified method,
      as allowed under SEC Staff Accounting Bulletin No. 107, averaging the
      vesting term and original contractual term. The risk-free interest rate for
      periods within the contractual life of the option is based on U.S. Treasury
      securities. The pre-vesting forfeiture rate used for the six months ended March
      31, 2007 was assumed to be zero. As required under SFAS No. 123(R), we will
      adjust the estimated forfeiture rate to our actual experience. Management will
      continue to assess the assumptions and methodologies used to calculate estimated
      fair value of share-based compensation. Circumstances may change and additional
      data may become available over time, which could result in changes to these
      assumptions and methodologies, and thereby materially impact our fair value
      determination.




A
      summary
      of the time-based stock awards as of March 31, 2007, and changes during the
      six
      months ended March 31, 2007, is as follows:


**Shares**
              
              **Weighted
                  Average Exercise**
                **Price**
              
              **Average
                  Remaining Contractual Term**
                **(years)**
              
              **Aggregate
                  Intrinsic**
                **Value**Outstanding
                  at October 1, 2006
              
              
              -Granted
              
              
              1,120,000
              
              $
              0.72
              
              
              9.7Forfeited
                  or expired
              
              
              -Outstanding
                  March 31, 2007
              
              
              1,120,000
              
              $
              0.72
              
              
              9.7Exercisable
                  at March 31, 2007
              
              
              75,000
              
              $
              0.64




The
      aggregate intrinsic value represents the pretax value (the period’s closing
      market price, less the exercise price, times the number of in-the-money options)
      that would have been received by all option holders had they exercised their
      options at the end of the period. The exercise price of stock options granted
      during the three months ended March 31, 2007 was equal to the market price
      of
      the underlying common stock on the grant date.




Income
      Taxes





In
      accordance with Statement of Financial Accounting Standards No. 109, *Accounting
      for Income Taxes* ,
      the
      Company uses an asset and liability approach for financial accounting and
      reporting for income taxes. The basic principles of accounting for income taxes
      are: (a) a current tax liability or asset is recognized for the estimated taxes
      payable or refundable on tax returns for the current year; (b) a deferred tax
      liability or asset is recognized for the estimated future tax effects
      attributable to temporary differences and carryforwards; (c) the measurement
      of
      current and deferred tax liabilities and assets is based on provisions of the
      enacted tax law and the effects of future changes in tax laws or rates are
      not
      anticipated; and (d) the measurement of deferred tax assets is reduced, if
      necessary, by the amount of any tax benefits that, based on available evidence,
      are not expected to be realized.





Loss
      per common share





The
      Company adopted Statement of Financial Accounting Standards No. 128 that
      requires the reporting of both basic and diluted earnings (loss) per share.
      Basic loss per share is calculated using the weighted average number of common
      shares outstanding in the period. Diluted loss per share includes potentially
      dilutive securities such as outstanding options and warrants, using the
      "treasury stock" method and convertible securities using the "if-converted"
      method. The assumed exercise of options and warrants and assumed conversion
      of
      convertible securities have not been included in the calculation of diluted
      loss
      per share as the affect would be anti-dilutive.





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Recent
      Accounting Pronouncements




In
      May
      2005, the FASB issued SFAS No. 154 “Accounting Changes and Error Corrections - a
      replacement of APB Opinion No. 20 and FASB Statement No. 3.” This Statement
      replaces APB Opinion No. 20, “Accounting Changes”, and FASB Statement No. 3,
“Reporting Accounting Changes in Interim Financial Statements” and changes the
      requirements for the accounting for and reporting of a change in accounting
      principle. This Statement applies to all voluntary changes in accounting
      principle. It also applies to changes required by an accounting pronouncement
      in
      the unusual instance that the pronouncement does not include specific transition
      provision. When a pronouncement includes specific transition provisions, those
      provisions should be followed. The Company has no transactions that would be
      subject to SFAS 154.




In
      February 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      155, Accounting for Certain Hybrid Instruments-an amendment of FASB Statements
      No. 133 and 140 ("SFAS 155"). SFAS 155 allows financial instruments that have
      embedded derivatives to be accounted for as a whole if the holder elects to
      account for the whole instrument on a fair value basis. SFAS 155 eliminates
      the
      need to bifurcate the derivative from its host, as previously required under
      Statement of Financial Accounting Standards No. 133, Accounting for Derivative
      Instruments and Hedge Accounting ("SFAS 133"). SFAS 155 also amends SFAS 133
      by
      establishing a requirement to evaluate interests in securitized financial assets
      to determine whether they are free standing derivatives or whether they contain
      embedded derivatives that require bifurcation. SFAS 155 is effective for all
      hybrid financial instruments acquired or issued by the Company on or after
      January 1, 2007. The Company does not anticipate any material impact to its
      financial condition or results of operations as a result of the adoption of
      SFAS
      155.




In
      March
      2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
      Assets” (“SFAS 156”). SFAS 156 addresses the accounting for recognized servicing
      assets and servicing liabilities related to certain transfers of the servicer’s
      financial assets and for acquisitions or assumptions of obligations to service
      financial assets that do not relate to the financial assets of the servicer
      and
      its related parties. SFAS 156 requires that all recognized servicing assets
      and
      servicing liabilities are initially measured at fair value, and subsequently
      measured at either fair value or by applying an amortization method for each
      class of recognized servicing assets and servicing liabilities. SFAS 156 is
      effective in fiscal years beginning after September 15, 2006. The adoption
      of
      SFAS 156 is not expected to have a material impact on our consolidated financial
      statements.




In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      157, “Fair Value Measurements.” The standard provides guidance for using fair
      value to measure assets and liabilities. Under the standard, fair value refers
      to the price that would be received to sell an asset or paid to transfer a
      liability in an orderly transaction between market participants in the market
      in
      which the reporting entity transacts. The standard clarifies the principle
      that
      fair value should be based on the assumptions market participants would use
      when
      pricing the asset or liability. In support of this principle, the standard
      establishes a fair value hierarchy that prioritizes the information used to
      develop those assumptions. The Statement is effective for financial statements
      issued for fiscal years beginning after November15, 2007, and interim periods
      within those fiscal years. The Company is currently evaluating the Statement
      to
      determine what impact, if any, it will have on the Company.




In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
      Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (“SFAS 158”).
      This statement requires balance sheet recognition of the funded status, which
      is
      the difference between the fair value of plan assets and the benefit obligation,
      of pension and postretirement benefit plans as a net asset or liability, with
      an
      offsetting adjustment to accumulate other comprehensive income in shareholders’
equity. In addition, the measurement date, the date at which plan assets and
      the
      benefit obligation are measured, is required to be the company’s fiscal year
      end. The Company currently Company is currently evaluating the Statement to
      determine what impact, if any, it will have on the Company.





In
      February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities-Including an amendment of FASB
      Statement No. 115" ("SFAS 159"). SFAS 159 expands the use of fair value
      accounting but does not affect existing standards which require assets or
      liabilities to be carried at fair value. Under SFAS 159, a company may elect
      to
      use fair value to measure accounts and loans receivable, available-for-sale
      and
      held-to-maturity securities, equity method investments, accounts payable,
      guarantees and issued debt. Other eligible items include firm commitments for
      financial instruments that otherwise would not be recognized at inception and
      non-cash warranty obligations where a




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warrantor
      is permitted to pay a third party to provide the warranty goods or services.
      If
      the use of fair value is elected, any upfront costs and fees related to the
      item
      must be recognized in earnings and cannot be deferred, e.g., debt issue costs.
      The fair value election is irrevocable and generally made on an
      instrument-by-instrument basis, even if a company has similar instruments that
      it elects not to measure based on fair value. At the adoption date, unrealized
      gains and losses on existing items for which fair value has been elected are
      reported as a cumulative adjustment to beginning retained earnings. Subsequent
      to the adoption of SFAS 159, changes in fair value are recognized in earnings.
      SFAS 159 is effective for fiscal years beginning after November 15, 2007 and
      is
      required to be adopted by the Company in the first quarter of fiscal 2009.
      The
      Company is currently is determining whether fair value accounting is appropriate
      for any of its eligible items and cannot estimate the impact, if any, which
      SFAS
      159 will have on its consolidated results of operations and financial
      condition.




NOTE
      C
      - STOCKHOLDERS’ EQUITY





The
      Company issued 9,999,999 shares of common stock to its directors on December
      20,
      2004 for $3,000 of which, $2,000 was paid in cash and $1,000 was paid by
      director’s reimbursable company expense. The shares issued have been restated to
      reflect the 1.3 to 1 forward split on August 28, 2005.





Donated
      capital represents Company expenses paid by certain directors of the Company
      totaling $146,999 during the period from inception to September 30,
      2005.





On
      August
      28, 2005, the Board of Directors of UpSNAP, Inc. approved a 1.3 for 1 forward
      stock split which was approved by a majority of the existing shareholders.
      The
      forward stock split has been retroactively applied and is reflected in the
      statement of stockholders’ equity.





On
      November 15, 2005, the closing under the Share Exchange occurred. 11,730,000
      shares of common stock were issued to the stockholders of UpSNAP USA, Inc.
      Additionally, 370,000 shares of common stock and 560,000 warrants were issued
      to
      an investment banking firm in consideration for services provided (See Note
      D).





On
      January 6, 2006, the Company acquired substantially all of the assets of
      XSVoice, Inc. 2,362,830 shares of common stock were issued to the stockholders
      of XSVoice, Inc. (See Note L).





NOTE
      D
      - WARRANTS





The
      Company has recorded the warrant instruments described below as equity in
      accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging
      Activity, paragraph 11(a), and EITF 00-19, Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own
      Stock.




During
      September - October 2005, the Company issued Series A warrants to purchase
      2,384,668 shares of common stock at $1.50 per share, in conjunction with the
      Company’s Private Placement. The fair value of the warrants in the amount of
      $1,935,260 was recorded as a debit and credit to additional paid in capital
      so
      there was no net impact on equity. The Private Placement warrants to the extent
      not exercised have expired.




In
      October 2005, the Company issued Series B warrants to purchase 2,200,000 shares
      of common stock at $1.10 per share to investor relations firms in conjunction
      with services related to the Private Placement offering. The warrants have
      a
      term of five years. These warrants have been recorded at fair value using the
      Black-Scholes option-pricing model. The value of these warrants, $2,057,125,
      was
      recorded as additional paid-in capital and a non-cash compensation expense
      in
      October 2005.




In
      November 2005, the Company issued warrants to purchase 560,000 shares of common
      stock at $0.90 per share to an investment bank in conjunction with investment
      services related to the Private Placement offering. The warrants have a term
      of
      five years. These warrants have been recorded at fair value using the
      Black-Scholes option-pricing model. The value of these warrants, $900,063,
      was
      recorded as additional paid-in capital and a non-cash compensation expense
      in
      November 2005.




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In
      September 2006, the Company extended the expiration date for the Series A
      Warrants from October 2006 to March 30, 2007. The fair value of the warrants
      in
      the amount of $71,540 was recorded as a debit and credit to additional paid
      in
      capital so there was no net impact on equity.





In
      February 2007, 619,000 Series A Warrants and 400,000 Series B Warrants were
      exercised at an Exercise Price of $0.25.





The
      following table summarizes information about warrants outstanding at March
      31,
      2007:





**Shares**
              **Exercisable**
            **Exercise**
              **Price**
            **Date
                of Expiration**Series
                B Warrant: Issued for investor relations services
            1,800,000
            $1.10
            October
                2010Viant
                Capital LLC Warrant
            560,000
            $0.90
            November
                2010Total
            2,360,000





The
      Company may from time to time reduce the exercise price for any of the warrants
      either permanently or for a limited period or extend their expiration
      date.





NOTE
      E
      - INCOME TAXES





For
      the
      twelve month periods ended September 30, 2006 and 2005, the Company incurred
      net
      operating losses and, accordingly, no provision for income taxes has been
      recorded. In addition, no benefit for income taxes has been recorded due to
      the
      uncertainty of the realization of any tax assets. At September 30, 2006, the
      Company had approximately $2,470,810 of accumulated net operating losses. The
      net operating loss carryforwards, if not utilized, will begin to expire in
      2024.




The
      components of the Company’s deferred tax asset are as follows:





Twelve
                Month
              Period
                Ended
              September
                30
            
            Twelve
                Month
              Period
                Ended
              September
                30**2006**
            
            **2005**Federal
                and state income tax benefit
            
            $
            864,783
            
            $
            238,854Change
                in valuation allowance on deferred tax assets
            
            $
            (864,783
            )
            
            (238,854
            )$
            -
            
            $
            -





For
      financial reporting purposes, the Company has incurred a loss since its
      inception. The Company provided for a full valuation allowance against its
      net
      deferred tax assets at September 30, 2006.




A
      reconciliation between the amounts of income tax benefit determined by applying
      the applicable U.S. and State statutory income tax rate to pre-tax loss is
      as
      follows:




Twelve
                Month Period
              Ended
                September 30
            
            Twelve
                Month Period
              Ended
                September 30**2006**
            
            **2005**Federal
                and state statutory rate
            
            $
            864,783
            
            $
            238,854Change
                in valuation allowance on deferred tax assets
            
            $
            (864,783
            )
            
            (238,854
            )$
            -
            
            $
            -




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NOTE
      F
      - GOING CONCERN





As
      shown
      in the accompanying financial statements, the Company has accumulated net losses
      from operations from inception through March 31, 2007 totaling $2,684,483 and
      as
      of March 31, 2007, has had limited revenues from operations. These factors
      raise
      substantial uncertainty about the Company’s ability to continue as a going
      concern.





The
      Company’s financial statements are prepared using the generally accepted
      accounting principles applicable to a going concern, which contemplates the
      realization of assets and liquidation of liabilities in the normal course of
      business. The accompanying financial statements do not include any adjustments
      that might be necessary if the Company is unable to continue as a going
      concern.





NOTE
      G
      - CONCENTRATION OF CREDIT RISK





For
      the
      six month period ended March 31, 2007, our largest customer accounted for more
      than 90% of sales.





The
      Company has deposits of $161,150 in a bank in excess of federally insured limits
      at March 31, 2007. The amount has not been reduced by items recorded in the
      account not yet clearing the bank.




Management
      periodically reviews the adequacy and strength of the financial institutions
      and
      deems this to be an acceptable risk.





NOTE
      H
      - PROPERTY AND EQUIPMENT





Property
      and equipment consisted of the following at March 31, 2007:




PROPERTY EQUIPMENT (Note
      H)


As
                  of March 31
              
              
              As
                  of March 31Fixed
                  Assets
              
              
              **2007**
              
              
              **2007**Computer
                  and office equipment
              
              $
              167,565
              
              $
              159,287Office
                  Equipment
              
              
              1,000
              
              
              1,000Office
                  Furniture
              
              
              3,000
              
              
              3,000Accumulated
                  Depreciation
              
              
              (67,353
              )
              
              (8,470
              )Total
                  Fixed Assets
              
              $
              104,212
              
              $
              154,817




Depreciation
      expense for the six months ended March 31, 2007 and 2006 was $25,139 and $
      8,470, respectively.





The
      estimated service lives of property and equipment are 3 - 7 years.





NOTE
      I
      - COMMITMENTS





In
      March
      2006, the Company began a lease for approximately 1,800 square feet of office
      space. The lease extends through February 28, 2008 at a rate of $2,250 per
      month. Future maturities associated with this commitment are as
      follows:





Year
                Ended
              September
                30
            Amount2007
            $13,5002008
            $11,250





NOTE
      J
      - RELATED PARTY TRANSACTION





The
      Chairman of the Board of the Company provides services to the Company as its
      CEO, for monthly compensation of $10,000 and related expenses. A board member
      and Vice President of the Company provides services to the Company for monthly
      compensation of $10,000 and related expenses.




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NOTE
        K
        - NOTE PAYABLE
 
 As
        part
        of the consideration for the purchase of XSVoice, the Company assumed the
        principal balance of a November 5, 2004 note that was in default between
        XSVoice, Inc. and one of its carrier partners. The principal balance of the
        note at the time
        of
        the acquisition of XSVoice, Inc. was $113,500 and it carries an interest
        rate is
        5% above the prime rate and is subject to an additional 2% after any Event
        of
        Default. The Company has been unable to identify any parties within the carrier
        that are aware of the note and are thus able to negotiate terms. The carrier
        has
        also made no attempts to collect the note. The Company carries the note as
        long-term and is not accruing interest.





NOTE
      L
      - ACQUISITION OF XSVOICE, INC.





On
      January 6, 2006, the Company completed the purchase of XSVoice, Inc., a
      privately held wireless platform and application developer, by acquiring
      substantially all of the assets of XSVoice, Inc. for a total purchase price
      of
      $6.3 million. XSVoice, Inc.’s results of operations have been included in the
      consolidated financial statements since the date of acquisition.





As
      a
      result of the acquisition, the Company acquired XSVoice's proprietary SWInG
      (Streaming Wireless Internet Gateway) technology, which enables mobile access
      to
      virtually any type of audio content, including Internet-based streaming audio,
      radio, television, satellite or other audio source. The acquisition also allowed
      the Company to gain access to carrier distribution channels and premium content
      provider relationships.





The
      aggregate purchase price of $6,393,223 consisted of $198,829 in cash
      consideration, the assumption of $130,000 in debt, and common stock valued
      at
      $5,735,000. In addition, the Company paid $80,820 for accounting and legal
      fees
      related to the acquisition and issued common stock valued at $265,074 for
      investment banking services.





The
      value
      of the 2,362,830 common shares issued as a result of this acquisition was
      determined based on the average market price of the Company’s common shares over
      the preceding 15-day period before the closing date of the acquisition. 590,710
      of the common shares given as consideration were placed into an escrow account
      and were subject to an Escrow Agreement which allowed for the release of shares
      as certain revenue thresh holds were met over the first year after the
      acquisition. Total revenues recognized during the year indicate that the
      shareholders of XSVoice are entitled to 60% of the escrowed shares. The Company
      has made a demand for the balance of the escrowed shares, or 147,677 shares
      to
      be returned to the company for cancellation.





The
      following table presents the allocation of the acquisition cost, including
      professional fees and other related acquisition costs, to the assets acquired
      and liabilities assumed, based on their fair values:





Allocation
                of acquisition cost:Accounts
                receivable
            
            $
            71,621.43Property,
                plant, and equipmentComputer
                equipment
            
            
            28,200.00Office
                equipment
            
            
            1,000.00Office
                furniture
            
            
            3,000.00SWinG
                copyright
            
            
            1,345,040.00Customer
                relationships
            
            
            104,000.00Employment
                contracts
            
            
            78,000.00Supplier
                contracts
            
            
            84,500.00Goodwill
            
            
            4,791,361.53Total
                assets acquired
            
            
            6,506,722.96Note
                payable
            
            
            (113,500.00
            )Total
                liabilities assumed
            
            
            (113,500.00
            )Net
                assets acquired
            
            $
            6,393,222.96





Of
      the
      $6,402,902 of acquired intangible assets, $1,345,040 was assigned to the SWinG
      technology platform, $104,000 for customer relationships, $78,000 for employment
      contracts, and $84,500 for supplier contracts. These intangible assets were
      assigned a life of 45 months. The remaining unallocated intangible balance
      of
      $4,791,362 was assigned to goodwill.





The
      allocation of the purchase price is based on preliminary data and could change
      when final valuation of certain intangible assets is obtained.





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**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS**





*The
      following discussion should be read in conjunction with the Financial Statements
      and related notes thereto included elsewhere in this report.*





**BUSINESS
      OVERVIEW**





UpSNAP
      is
      a mobile search and entertainment engine that helps mobile US consumers quickly
      find mobile content and entertainment services. UpSNAP provides a seamless
      platform for search & content delivery to almost all mobile devices in the
      United States. Our catalog of free and premium streaming audio content delivers
      compelling content from some of the world’s premier brands including Fan Scan
      (the NASCAR in car-audio application on Sprint/Nextel), ABC, ESPN Radio, ESPN
      Deportes, Radio Disney and Batanga. Over the past 12 months, UpSNAP has built
      one of the largest Radio networks of content from over 1,500 content providers.
      It has built a mobile advertising platform that allows for the automated
      insertion of audio and pay-per-call contextual mobile advertising. UpSNAP
      currently operates in the United States only.





***MD&A
      Overview:***





UpSNAP
      sells a rich platform of mobile content to consumers in the United States,
      and
      makes money from subscriptions and mobile advertising. UpSNAP has searchable
      mobile content from over 1,500 content providers, ranging from live NASCAR
      in-car broadcasts, to ESPN sports and Hip-Hop radio. In April 2007, UpSNAP
      launched a multi-media search engine for all other mobile content, such as
      ringtones, and mobile videos stored on the Internet.





Mobile
      consumers are now buying more and more powerful phones with Internet features
      cable of sending emails, running applications, and browsing the Internet.
      According to the Pew Wireless Internet Access study in February 2007, as many
      as
      25% of Internet users now have a cell-phone capable on accessing the Internet.
      In the key youth demographic of 18-34, consumers are using their cell-phones
      as
      their primary method of communication and entertainment- effectively replacing
      their Personal Computer.





The
      market in general for mobile services is continuing to show very high growth
      rates.  In the U.S, according to the Cellular Telecommunications &
Internet Association (CTIA), as reported in its Wireless Quick Facts December
      2006, wireless subscribers reached 233 million by December 2006, reaching more
      than 76% of the total U.S. population.




Now
      that
      the number of subscribers has almost reached saturation point - particularly
      in
      the 18-35 demographic - the mobile operators are seeking to increase their
      revenues from wireless data usage. According to the CTIA, Wireless Data Revenues
      in the US grew particularly sharply, showing growth of 82% from $4.8 billion
      in
      the first half of 2005, to $8.7 billion for the latter six months of
      2006.





In
      the
      past, the typical revenue model for mobile content has been a paid subscription
      model. Consumers have proved willing to spend several dollars on a 20 second
      ring-tone from a mobile carriers store, even when they can purchase the whole
      song on Apple’s iTunes for a mere .99 cents on their computer, an example of the
      current large discrepancies between the mobile and Internet content pricing
      models. As the features of the Internet and PCs converge into powerful handsets
      with wireless Internet access, the Company predicts that these discrepancies
      cannot last for long.





The
      global market for mobile-phone premium content is expected to expand to more
      than $43 billion by 2010, rising at a compound annual growth rate of 42.5
      percent from $5.2 billion in 2004, according to iSuppli Corp.





UpSNAP
      management believes that this paid content subscription model will start to
      migrate to a search and advertising driven model over time. Most mass media
      business models have started as subscription only, and then migrated with the
      increasing reach of consumers into advertising driven services. As John
      Templeton said: “History never repeats itself, but it often
      rhymes.”





In
      the
      United States, most mobile content is sold from ‘virtual’ shops on the mobile
      handsets. However, this trend is set to change. In Europe, the mobile operators
      are leaving content choice and selection to media and distribution companies
      who
      sell mobile content. Consumers in the US are now being increasingly exposed
      to
      direct marketing for mobile products.





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UpSNAP
      has built a search and advertising driven business model, which enables UpSNAP
      and its media and carrier partners to make money from advertising, rather than
      from the content subscription. UpSNAP is very well positioned to take advantage
      of the enormous consumer demand for mobile content and entertainment. A 2006
      study from Shosteck Group, showed that revenues from Mobile advertising could
      reach $9.6 billion by 2010. Consumers will also increasing need quick and
      convenient ways to search for all the latest content they can consume on their
      mobile phone.





In
      order
      to increase sales, UpSNAP needs to increase its media partnerships that can
      actively promote offers direct to consumers, as well as continue to partner
      with
      as many of the mobile operators as possible.





UpSNAP
      is
      actively in partnership with media companies who can reach customers directly
      with direct response offerings. UpSNAP has recently launched ESPN Radio on
      the
      Alltel network, renewed its yearly NASCAR in-Car-Audio deal with Sprint and
      United Management for 2007, and signed a Letter of Intent with dating site
      Hot-or-Not to produce a mobile Hot-or-Not dating service to be promoted via
      the
      network operators. UpSNAP signed a contract with Lincoln Financial which enables
      consumers to listen and search for popular shows such as the Bob and Sheri
      Show
      on demand from their mobile phones. UpSNAP has a strong sales pipe-line of
      media
      distribution deals that will be announced over the coming year.





Media
      companies and Advertising Agencies are hopeful that mobile advertising can
      reach
      the massive reach numbers of a TV campaign, combined with the direct response
      and tracking potential of the Internet. However, mobile marketing is still
      in
      its infancy as they struggle with the right forms of direct marketing, privacy
      issues, and how to structure mobile advertising deals. The pace of our deal
      making activities with the media companies has been much slower than we would
      have liked. UpSNAP is looking at acquisitions to push this process quicker,
      and
      has hired a media specialist to increase our business development capacity
      and
      increase the amount of deals in our pipeline.




In
      January 2006 UpSNAP derived 99% of its revenues from subscription revenue from
      one major US mobile operator. In our second fiscal quarter Jan-March 2007,
      our
      dependency on this carrier has been reduced to approximately 90% of our
      revenues, as we move towards the more lucrative and higher margin search and
      advertising related revenues.





Principal
      Products and Services





UpSNAP
      has two principal products and services:





1
            Mobile
                Search Engine and Advertising
                Platform





2
            Mobile
                Content Services





**MOBILE
      SEARCH ENGINE AND ADVERTISING PLATFORM**





UpSNAP
      has expanded its search engine suite to enable consumers to search for a wide
      variety of mobile content, services and data. In April 2007 UpSNAP launched
      a
      mobile search tool that finds mobile data stored on the Internet. Mobile
      consumers can search for ringtones, mobile video content, mobile games, and
      other images, wallpapers and multi-media content.





The
      suite
      of mobile search product now allows consumers to find and access mobile content
      and service from any mobile phone in the US. The UpSNAP mobile search engine
      platform allows consumers to search via text message, WAP and through a digital
      download on the mobile handset to a mobile “short-code” or 5 digit telephone
      number, which in our case is 2SNAP (27627). Current services include yellow
      pages directory assistance, sport scores, horoscopes, price comparison shopping
      services, weather, calorie counter, spelling, and airline travel information.
      Consumers type in search requests e.g. “Leo” for a horoscope reading. The
      consumer will be offered a free horoscope, but also receive an advertisement
      via
      a text message to speak with an astrologer direct or hear an extended audio
      horoscope.





Similarly,
      consumers looking for sports scores, for example, will receive a text message
      advertising UpSNAP premium sports services. The short-code can also be used
      for
      Premium Text Messaging Services (PSMS) which are directly billed by the
      carriers, and included on the consumer’s phone bill. UpSNAP has PSMS services
      provisioned for billing with most of the major US carriers including, Cingular,
      Sprint/Nextel, T-Mobile and Alltel. These short-codes at present will only
      work
      on US handsets, limiting the geographic coverage of the service to those areas
      in the United States with cell-phone coverage. Our mobile search engine was
      launched live to consumers in November 2005.




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These
      searches are free to use by the consumer - save for any communications cost
      incurred by their cellular phone usage according to their carrier contract.





UpSNAP
      makes money from advertisers who love the direct response pay-per-click model
      of
      the Internet, and now want the same model to work on mobile.





Once
      a
      consumer makes a search for a specific search category or uses a “key-word’
identified and purchased by an UpSNAP partner as indicative of buying behavior,
      the UpSNAP advertising platform inserts a “paid’ advertising listing into the
      search reply.




UpSNAP
      has a Voice Over Internet Protocol (VoIP) switch which seamlessly bridges the
      merchant telephone number with the consumer via a call connect. Our Pay Per
      Call
      advertising platform can then record the number of calls received by a merchant
      and produce an audit trail for a billing engine. UpSNAP partners with
      specialized “Pay-Per-Call” companies, that sign-up advertisers nationwide
      throughout the US for this type of advertising **.**





Our
      pay-per-call advertising platform technology was built in 2005, and our first
      pay-per-call-partnership was announced with Ingenio, who provides pay-per-call
      advertisers nationwide on May 4, 2006. We rely on third party operators for
      our
      advertising. For example if a national pizza chain were to only want to target
      select US cities, our third party partners would only pass us the advertising
      for a specific geographical locale.





Pay-per-call
      advertising is receiving a much higher margin than pay-per-click on the
      Internet. The average price of a pay-per-click on Google according to the Wall
      Street Journal was .50 cents. Pay Per Call, which directly bridges a consumer
      who is looking to buy on their cell-phone with a merchant starts at $2 dollars
      a
      call, and goes up considerably depending on the nature of the
      sale.





**MOBILE
      CONTENT SERVICES**





UpSNAP’s
      SWinG (Streaming Wireless Internet Gateway) platform enables mobile access
      to
      virtually any type of live and on-demand streaming audio content, such as radio,
      podcasts and live sports events. The software translates data from almost any
      type of common audio format, for example MP3 files, to allow it to be streamed
      to cell-phones capable of supporting audio streaming. If the cell-phone does
      not
      have any data services, the platform broadcasts the audio via the voice channel
      on the cell-phone. The SWinG platform runs on any mobile phone in the US,
      regardless of handset, data package or software. The SWinG platform was built
      over the course of 2002-2004 and is fully operational.





Our
      catalog of free and premium streaming audio content delivers compelling content
      from some of the world’s premier brands including Fan Scan, the NASCAR in
      car-audio application on Sprint/Nextel, ABC, ESPN Radio, ESPN Deportes, Radio
      Disney & Botanga. The catalogue of content includes over 1,500 content
      providers, with a wide selection of content ranging from Radio Stations, to
      sports coverage and Podcasts.





The
      company generates subscription revenues from the SWinG platform by providing
      the
      technology platform to major companies that already have a relationship with
      the
      carriers, such as ESPN and NASCAR. In addition, the Company generates revenues
      acting as the principal in the relationship with the carriers, providing content
      from over 1,500 content providers.





The
      subscription revenues can take two forms. 1.) One off Subscription: A consumer
      subscribes for a particular event or for a limited amount of time. For example,
      in the case of the NASCAR Fan-Scan in car audio content, consumers purchase
      a
“$4.99 race pass” that is only good for one NASCAR race, and will simply expire
      after the race is finished. 2.) Recurring Subscribers: Consumers can also
      subscribe per month. For example, in the case of the NASCAR Fan-Scan in car
      audio content, consumers purchase a “$9.99 race pass” that is valid for use each
      month, until the consumer chooses to opt out.





In
      each
      case, the cost of the paid service is added to the consumer’s phone-bill, and
      the carriers pay UpSNAP after deducting their margin and associated
      costs.


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**DISTRIBUTION
      AGREEMENTS**





UpSNAP’s
      revenues are directly affected by its distribution agreements. The distribution
      of our content occurs in one of two ways:





1
            Carrier
                or “on deck” promotion - where the carrier actually promotes the service
                from the menu’s on the carrier handset, bills the consumer on their mobile
                phone bill, and takes its cuts, and then remits the balance to UpSNAP.
                UpSNAP has ‘on deck’ agreements with Sprint/Nextel





2
            Off
                Deck Promotion - where the consumer signs up for services through
                media
                partner promotions, internet advertising, affiliate marketing
                relationships, or other media channels directly, and payment is made
                via a
                short-code or Premium SMS (PSMS) to the consumer’s mobile phone bill.
                UpSNAP has billing relationships in place with most major US carriers
                including, Cingular, T-Mobile, Sprint/Nextel and Alltel,




The
      Business





Our
      business plan calls for acquisitions in the mobile advertising and content
      sector, that will allow us increase our average revenue per subscriber as well
      as our distribution channels.  We continue to look for acquisition targets
      although this will depend upon the timing and availability of appropriate
      acquisition opportunities and our ability to find capital to acquire the same
      and provide working capital.





As
      of May
      8, 2007 we have a total of six full-time employees and one part-time individual
      contractor. We do not expect significant increases in employees, but do expect
      incremental additions in line with revenues in all areas of the business.





***Margins***





The
      revenue stream from the consumer is shared across several parties:





1
            The
                wireless carrier, who operates the cellular infrastructure and billing
                interface to add micro-payments from wireless services onto the customer
                phone bill. The carrier will typically demand 30-50% of the gross
                revenues. UpSNAP reports revenues net of the carrier gross margin.
                For
                example, if UpSNAP sells an application for $10.00 to the consumer,
                UpSNAP
                would only report $5-$7 of net revenue.





2
            An
                aggregator or mobile delivery and clearing house for the receipt
                and
                delivery of mobile messages will take 5-10% of the gross sale
                value





3
            The
                content owner who has the rights to the mobile
                content.





The
      mobile supplier, in this case UpSNAP reports net revenue after the carrier
      and
      aggregator have taken their cut of 30 -60%. In turn, UpSNAP’s average pay-out to
      content providers in 30% of the net revenue.





UpSNAP’s
      margin improves considerably on advertising related services such as banner
      ads,
      audio ads, and Pay-per-call advertising. For these services, UpSNAP receives
      net
      revenue from an advertising partner. When UpSNAP deals directly with the media
      companies, the wireless carriers do not share in this revenue.





***LIQUIDITY
      AND CAPITAL RESOURCES***





Overall,
      we have funded our cash needs from inception through March 31, 2007 with the
      $2,146,200 in funds acquired as part of the September - October 2005 Private
      Placement. In addition, the Company raised $254,750 in February 2007
      from the sale
      of 619,000 Series A warrants and 400,000 Series B warrants at $0.25
      each.





As
      of
      March 31, 2007, our current assets were $435,628 and our current liabilities
      were $103,570, which resulted in net working capital of $332,058. As of May
      12,
      2007 cash on hand was $207,493.





Our
      cash
      burn rate continues to decline. For the six months ended March 31, 2007, net
      cash flow used by operating activities was $385,270 compared to net cash used
      in
      operating activities of $656,308 for the six months ended March 31, 2006. The
      decrease in cash flows used in operating activities is mainly due to the
      decrease in the loss for the period adjusted for non-cash items.




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For
      the
      three months ended March 31, 2007, net cash flow used by operating activities
      was $135,779 compared to net cash used in operating activities of $656,308
      for
      the three months ended March 31, 2006. The decrease in cash flows used in
      operating activities is mainly due to the decrease in the loss for the period
      adjusted for non-cash items.





Net
      cash
      flows used by investing activities amounted to $5,258 for the six months ended
      March 31, 2007 compared to $1,545,334 provided for the six months ended March
      31, 2006. The Company received $1,919,662 in cash as part of the reverse merger
      in November 2005.





The
      Company received $254,750 in net cash flow provided by financing activities
      for
      the six months ended March 31, 2007. These cash proceeds were resultant from
      the
      sale of 619,000 Series A warrants and 400,000 Series B warrants at $0.25 each.
      The Company relied on Rule 4(2) in this private placement. There were no
      net cash flows provided by financing activities for the six months ended March
      31, 2006.





In
      summary, based upon the cash flow activities as previously discussed, for the
      six months ended March 31, 2007, our overall cash position decreased by
      $135,788.





At
      the
      date of this report we are continuing to incur losses. We used capital of
      approximately $385,000 during the six month period ended March 31, 2007 to
      fund
      operations. The company’s current financial models indicate that the Company
      will have an average cash burn rate of $23,000 per month from operations and
      that within nine months the Company’s cash balances may fall to levels that will
      not sustain operations. This financial model is highly sensitive to revenue
      forecasts based on existing revenue sources.





The
      Company does not have any material commitments for capital expenditures as
      of
      March 31, 2007.





The
      company is likely to be dependent on raising a minimum of $300,000 in additional
      capital in order to fund its existing operating plan over the next twelve months
      and maintain a cash balance of approximately $ 250,000 at the end of such
      period.





The
      Company has no commitments for such capital. The Company may obtain up to
      $2,484,000 in additional capital if all of the Company’s remaining outstanding
      Series B and Viant warrants are exercised at their stated exercise price;
      however there is no assurance that any of these warrants will be exercised.
      The
      Company will also seek long-term financing through additional debt or equity
      financing. Without such additional capital we would likely have to curtail
      our
      activities (including our marketing and research and development expenses)
      during the next twelve months but may be able to continue operations depending
      on the development of new revenue sources.





Our
      auditors have raised substantial doubt about our ability to continue as a
      going concern due to recurring losses from operations. We expect to continue
      to
      have net operating losses until we can expand our sales channel and implement
      our marketing efforts. Our financial statements do not include any adjustments
      relating to the recoverability and classification of recorded asset amounts
      nor
      to amounts and classification of liabilities that may be necessary should we
      be
      unable to continue as a going concern.





***RESULTS
      OF OPERATIONS***





SIX-MONTH
      PERIOD ENDED MARCH 31, 2007 COMPARED TO SIX-MONTH PERIOD ENDED MARCH 31,
      2006




Revenue
      for the six month period ended March 31, 2007 grew to $480,397 compared to
      $244,042 during the six month period ended March 31, 2006.





Our
      net
      losses during the six-month period ended March 31, 2007 were ($703,722) or
      ($0.03) per common share compared to a net loss of ($682,443) or ($0.04) per
      common share during the six-month period ended March 31, 2006.





UpSNAP
      generates approximately half of its revenue from Internet Radio Stations, who
      may be affected by the recent Copyright Royalty Board decision to more than
      double royalty rates for distribution over Internet or mobile data networks
      in
      2006, and mandates further major increases in 2007 and 2008. The Copyright
      Royalty Board decision, which was long overdue, is also retroactive to January
      2007, and new payments are to be collected by July 2007. The decision has
      prompted




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outrage
      in the Internet Radio industry, which claims the industry will effectively
      be
      put of business by the large increases in royalties. A recent appeal of the
      ruling was denied. The Internet Radio Industry has responded by petitioning
      Congress and the Senate, through the Internet Radio Equality Act, which would
      reverse the Copyright Royalty Board’s decision through an Act of Congress.
      Senators Brownback (R-Kansas) and Wyden (D-Oregon) also introduced a bipartisan
      bill aimed at reversing the decision in the Senate.





The
      increase in royalty payments is performed on a per listener basis. On the
      Internet many people choose to “listen” to an Internet stream all day long, so
      the audience reach is relatively high. In the mobile environment, people are
      typically listening to broadcasts for a very short length of time. Our service
      is a mobile interactive service that our customer requests on demand. It is
      not
      clear at this stage if our service is subject to the extra royalty payments
      as
      approved by the Copyright Royalty Board for mobile services.




UpSNAP
      is
      watching the legal situation carefully. If the Copyright Royalty Boards decision
      is upheld and Congress fails to reverse the ruling, UpSNAP may be affected
      if
      some of the Internet Radio Stations are put out of business. If the decision
      is
      upheld UpSNAP believes that revenue losses will occur, albeit they will be
      offset to some extent due to:





·
            UpSNAP
                has over 1500 radio station partners in the US and operating abroad.
                This
                decision, should it be upheld, only affects music providers located
                in the
                United States.


·
            UpSNAP
                partners with sports radio providers such as EPSN and Sporting News
                which
                are not affected by the decision.


·
            Should
                the decision be upheld, UpSNAP feels that it is likely that only
                the
                larger Internet Radio Stations will survive. UpSNAP makes the bulk
                of its
                music revenues from the top 5% of music
                providers.





Cost
      of
      revenues for the six month period ended March 31, 2007 were $227,278, resulting
      in a gross profit of $253,119 (52.7%) compared to cost of revenues for the
      six
      month period ended March 31, 2006 of $133,466 and a gross profit of $110,576
      (45.3%). Costs of revenues were primarily fees paid to the company’s content
      providers; royalty payments for the music content, server farm, and call connect
      charges. The Company has increased gross margins by negotiating better terms
      with content providers and modifications to the technology supporting the
      company’s offerings.





During
      the six-month period ended March 31, 2007, we incurred operating expenses of
      $931,127 compared to operating expenses of $820,499 incurred during the
      six-month period ended March 31, 2006, This increase was primarily driven by
      non-cash increases of $239,197 in amortization expense related to intangible
      assets generated as a result of the XSVoice acquisition and an increase of
      $73,818 in stock based compensation resultant from the company’s stock option
      plan introduced in November 2006.





THREE-MONTH
      PERIOD ENDED MARCH 31, 2007 COMPARED TO THREE-MONTH PERIOD ENDED MARCH 31,
      2006





The
      Company had revenues of $229,827 for the three month period ended March 31,
      2007
      compared to $244,042 during the three month period ended March 31, 2006.





Our
      net
      losses during the three-month period ended March 31, 2007 were ($268,711) or
      ($0.01) per common share compared to a net loss of ($317,506) or ($0.02) per
      common share during the three-month period ended March 31, 2006. On a cash
      basis
      our net cash used in operations fell to $135,779 for the quarter ended March
      31 st ,
      2007,
      compared to $656,308 for the quarter ended March 31 st 2006.





For
      the
      quarter ended March 31, 2007 revenues from Nextel are down approximately 18%
      from the comparable quarter ended March 31, 2006.. The revenue decline was
      principally due to lower new subscriptions for the Company’s music services,.
      During April, this decline has been reversed. The Company is aggressively
      attempting to diversify its revenue stream by focusing on advertising revenues
      and selling subscription services directly to consumers. If the company is
      not
      successful in its continuing efforts to diversifying its revenue base or halting
      the slide in revenues, then the Company’s operating results and liquidity will
      continue to be adversely affected.





Cost
      of
      revenues for the three month period ended March 31, 2007 were $100,122,
      resulting in a gross profit of $129,706 (56.4%) compared to cost of revenues
      for
      the three month period ended March 31, 2006 of $136,996 and a gross profit
      of
      $107,046 (43.9%). Costs of revenues were primarily fees paid to the company’s
      content providers; royalty payments for the




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music
      content, server farm, and call connect charges. The Company has increased gross
      margins by negotiating better terms with content providers and modifications
      to
      the technology supporting the company’s offerings.





During
      the three-month period ended March 31, 2007, we incurred operating expenses
      of
      $368,833 compared to operating expenses of $459,393 incurred during the
      three-month period ended March 31, 2006.





***OFF-
      BALANCE SHEET ARRANGEMENTS***





The
      Company did not have any off -balance sheet arrangements as of the fiscal period
      ended March 31, 2007.




**ITEM3. CONTROLS
      AND
      PROCEDURES**





*Quarterly
      Evaluation of Controls* .
      As of
      the end of the period covered by this quarterly report on Form 10-QSB, we
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures ("Disclosure Controls"). This evaluation (“Evaluation”)
      was performed by our Chairman and Chief Executive Officer, Tony Philipp, and
      our
      Chief Financial Officer, Paul C. Schmidt (“CFO”). In addition, we have discussed
      these matters with our securities counsel and board. In this section, we present
      the conclusions of our CEO and CFO as of the date of the Evaluation with respect
      to the effectiveness of our Disclosure Controls.





*CEO
      and CFO Certifications* .
      Attached to this quarterly report, as Exhibits 31.1 through 31.4, are certain
      certifications of the CEO and CFO, which are required in accordance with the
      Exchange Act and the Commission's rules implementing such section (the "Rule
      13a-14(a)/15d-14(a) Certifications"). This section of the quarterly report
      contains the information concerning the Evaluation referred to in the Rule
      13a-14(a)/15d-14(a) Certifications. This information should be read in
      conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete
      understanding of the topic presented.





*Disclosure
      Controls* .
      Disclosure Controls are procedures designed with the objective of ensuring
      that
      information required to be disclosed in our reports filed with the Commission
      under the Exchange Act, such as this quarterly report, is recorded, processed,
      summarized and reported within the time period specified in the Commission's
      rules and forms. Disclosure Controls are also designed with the objective of
      ensuring that material information relating to us is made known to the CEO
      and
      the CFO by others, particularly during the period in which the applicable report
      is being prepared.





*Scope
      of the Evaluation* .
      The CEO
      and CFO's evaluation of our Disclosure Controls included a review of the
      controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect
      of the controls on the information generated for use in this quarterly report.
      This type of evaluation is done on a quarterly basis so that the conclusions
      concerning the effectiveness of our controls can be reported in our quarterly
      reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals
      of
      these various evaluation activities are to monitor our Disclosure Controls,
      and
      to make modifications if and as necessary. Our intent in this regard is that
      the
      Disclosure Controls will be maintained as dynamic systems that change (including
      improvements and corrections) as conditions warrant.





*Conclusions.* Based
      upon the Evaluation, our Disclosure Controls and procedures are designed to
      provide reasonable assurance of achieving our objectives. Our CEO and CFO have
      concluded that our Disclosure Controls and procedures are effective at that
      reasonable assurance level to ensure that material information relating to
      the
      Company is made known to management, including the CEO and CFO, particularly
      during the period when our periodic reports are being prepared.. Additionally,
      there has been no change in our internal controls over financial reporting
      that
      occurred during our most recent fiscal quarter that has materially affected,
      or
      is reasonably likely to affect, our Internal Controls over financial
      reporting.





**PARTII
      - OTHER INFORMATION**




**ITEM2. UNREGISTERED
      SALES OF
      EQUITY SECURITIES AND USE OF PROCEEDS**





During
      the period from January 20, 2007 to February 12, 2007, the Company issued
      1,019,000 shares of common stock each at a price of $0.25 upon exercise of
      previously placed warrants (619,000 Series A warrants and 400,000 Series B
      warrants) . The exercise price of the warrants was reduced on a limited basis
      to
      permit this exercise. Total proceeds of $254,750 were received and added to
      working capital. The Company relied on Rule 4(2) in this private placement.




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**ITEM5. OTHER
      INFORMATION**





On
      May
      11, 2007 the Company’s Compensation Committee approved a change in the
      compensation plan for the Company’s CFO. Under this new arrangement, in lieu of
      cash compensation, the Company’s CFO will be compensated for the company’s third
      and fourth fiscal quarter with a restricted stock grant of 130,000 shares to
      be
      vested 21,666.67 shares per month, effective April 1, 2007.




**ITEM6. EXHIBITS**





**The
      exhibits to this form are listed in the attached Exhibit
      Index.**


****


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SIGNATURES





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




UPSNAP,
                INC.
              (Registrant)Date:  May 15,
              2007
            By:
            /s/ Tony
              PhilippTony
              PhilippChairman of the
                Board
                and
              Chief Executive Officer
              (Principal Executive
                Officer)


Date:  May 15,
              2007
            By:
            /s/ Paul C.
              SchmidtPaul
              C. SchmidtChief Financial
                Officer
              (Principal Financial
                Officer)


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**INDEX
      TO EXHIBITS**





Exhibit
                No.
            **Description**2.1
            Share
                Exchange Agreement, dated November 15, 2005, by and among UpSNAP,
                Inc. and
                the former stockholder of UpSNAP USA (incorporated by reference to
                Exhibit
                2.1 in our current report on Form 8-k filed on November 16,
                2005)3.1.1
            Articles
                of Incorporation as filed with the Secretary of State of the State
                of
                Nevada on July 25, 2003 (incorporated by reference to Exhibit 3.1
                in our
                Registration Statement SB-2 filed on September 18,
                2003)




3.1.2
            Certificate
                of Amendment filed on November 7, 2005 (incorporated by reference
                to
                Exhibit 3.1 in our current report on Form 8-K filed on November 16,
                2005)3.2
            Bylaws
                adopted on July 25, 2003 (incorporated by reference to Exhibit 3.2
                in our
                Registration Statement SB-2 filed on September 18,
                2003)10.1
            Form
                of Subscription Agreement for September 2005 Private Placement
                (incorporated by reference to Exhibit 10.1 in our quarterly report
                for the
                fiscal period ended on September 2005)10.2
            Form
                of Registration Rights Agreement for September 2005 Private Placement
                (incorporated by reference to Exhibit 10.2 in our quarterly report
                for the
                fiscal period ended on September 2005)10.3
            Debt
                Conversion Agreement, dated October 31, 2005, among UpSnap, Inc.,
                518464
                B.C. Ltd., Art Mapp Communications, Inc., Jason Sundar, and Yvonne
                New.
                (incorporated by reference to Exhibit 10.3 in our quarterly report
                for the
                fiscal period ended on September 2005)10.4
            Form
                of Series A Warrant (incorporated by reference to Exhibit 10.4 in
                our
                quarterly report for the fiscal period ended on September 2005)10.5
            Form
                of Series B Warrant (incorporated by reference to Exhibit 10.5 in
                our
                quarterly report for the fiscal period ended on September
                2005)10.6
            Directors
                and Officers Insurance Policy, dated October 18, 200510.7
            Confirmatory
                Assignment, dated June 1, 2005, by and between UpSNAP USA, Inc. and
                Alto
                Ventures, Inc. (incorporated by reference to Exhibit 10.7 in our
                quarterly
                report for the fiscal period ended on December 31,
                2005)10.8
            Asset
                Purchase Agreement, dated January 6, 2006, by and between UpSNAP,
                Inc. and
                XSVoice, Inc. (incorporated by reference to Exhibit 10.1 in our current
                report on Form 8-K filed on January 12, 2006)10.9
            Agreement
                dated as of February 12, 2007 between UpSNAP, INC. AND
                SPRINT/NEXTEL.210.10
            Commercial
                Service Agreement between UpSNAP, Inc. and Simplewire, Inc. dated
                February
                7, 2006110.11
            Letter
                Agreement between UpSNAP, Inc. and Tony Philipp dated July 10, 2006110.12
            Letter
                Agreement between UpSNAP, Inc. and Richard Jones dated July 10, 20061




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10.13
            Letter
                Agreement between UpSNAP, Inc. and Paul Schmidt dated July 10, 2006131.1
            Rule
                13a-14(a)/15d-14(a) Certification of Tony
                Phillips, Chairman and Chief Executive Officer*31.2
            Rule
                13a-14(a)/15d-14(a) Certification of Paul C.
                Schmidt, Chief Financial Officer*32
            Certification
                of Principal Executive Officer and
                Principal Financial Officer furnished pursuant to 18 U.S.C. Section
                1350,
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.*





*
      filed
      herein


1 incorporated by reference to Amendment No. 2 our Form SB-2 Registration
      Statement, Reg. No. 333-132893, filed July 13, 2006.


2 incorporated
      by reference to Form 8-K filed March 20, 2007




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