U. S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934.

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934.
              FOR THE TRANSITION PERIOD FROM _________ TO _________

                         COMMISSION FILE NUMBER: 0-30781


                                 MANGOSOFT, INC.
        (Exact name of small business issuer as specified in its charter)


               NEVADA                                    87-0543565
   (State or other jurisdiction                        (IRS Employer
 of incorporation or organization)                  Identification No.)



        12 PINE STREET EXTENSION
                NASHUA, NH                                 03060
(Address of principal executive offices)                 (Zip code)


                    ISSUER'S TELEPHONE NUMBER: (603) 324-0400

         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 [ ]

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

         COMMON STOCK                                 1,013,038 SHARES
       $0.001 Par Value                       (Outstanding on August 13, 2004)

<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

                              INDEX TO FORM 10-QSB



                                                                            Page
PART I.  FINANCIAL INFORMATION

ITEM 1 - Condensed Consolidated Financial Statements (unaudited):

Balance Sheets as of June 30, 2004 and December 31, 2003...................... 3
Statements of Operations for the Three Months Ended June 30, 2004 and 2003.... 4
Statements of Operations for the Six Months Ended June 30, 2004 and 2003...... 5
Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003...... 6
Notes to the Condensed Consolidated Financial Statements...................... 7

ITEM 2 - Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................ 9

ITEM 3 - Controls and Procedures..............................................18

PART II. OTHER INFORMATION

ITEM 1 - Legal Proceedings....................................................19
ITEM 6 - Exhibits and Reports on Form 8-K.....................................20

Signature ....................................................................22


                                       2
<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  JUNE 30,        DECEMBER 31,
                                                                   2004              2003
                                                               ------------      ------------
                                                                (UNAUDITED)
<S>                                                            <C>               <C>
                               ASSETS
Current Assets:
     Cash and cash equivalents ...........................     $    299,289      $    317,444
     Short-term investments ..............................          621,109           607,439
     Accounts receivable .................................           32,076            27,281
     Prepaid expenses and other current assets ...........            1,178             1,625
                                                               ------------      ------------
          Total current assets ...........................          953,652           953,789
Property and equipment - net .............................           34,196            58,765
Long-term investments ....................................               --           180,547
Intangibles - net ........................................           84,750           140,195
Other assets .............................................            5,066             5,916
                                                               ------------      ------------
               Total .....................................     $  1,077,664      $  1,339,212
                                                               ============      ============

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Accounts payable ....................................     $    752,707      $    671,383
     Accrued compensation ................................           13,441            12,392
     Other accrued expenses and current liabilities ......          244,441           335,981
     Deferred revenue ....................................           10,576            19,976
                                                               ------------      ------------
          Total current liabilities ......................        1,021,165         1,039,732
                                                               ------------      ------------

Commitments and contingencies

Stockholders' Equity:
    Preferred stock-$.001 par value; authorized,
    5,000,000 shares;issued and outstanding, 20,000 ......               20                20
    Common stock .........................................            1,013             1,013
    Additional paid-in capital ...........................       88,725,694        88,725,694
    Deferred compensation ................................             (944)           (1,460)
    Accumulated deficit ..................................      (88,669,284)      (88,425,787)
                                                               ------------      ------------
          Total stockholders' equity .....................           56,499           299,480
                                                               ------------      ------------
               Total .....................................     $  1,077,664      $  1,339,212
                                                               ============      ============
</TABLE>

     See notes to the unaudited condensed consolidated financial statements.


                                       3
<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED JUNE 30,
                                                              ----------------------------
                                                                  2004             2003
                                                              -----------      -----------
                                                                       (UNAUDITED)

<S>                                                           <C>              <C>
Software license revenues ...............................     $        --      $    15,634
Service revenues ........................................         133,269          115,687
                                                              -----------      -----------
     Total revenues .....................................         133,269          131,321
Costs and expenses:
  Cost of services ......................................          99,149          131,095
  Engineering and development ...........................              --              839
  Selling and marketing .................................              --               --
  General and administrative (1) ........................         148,434          283,160
  Stock-based compensation expense ......................             258              258
                                                              -----------      -----------
     Loss from operations ...............................        (114,572)        (284,031)
Interest income .........................................          15,406           31,231
                                                              -----------      -----------
Net loss ................................................     $   (99,166)     $  (252,800)
                                                              ===========      ===========

Net loss per share  - basic and diluted .................     $     (0.10)     $     (0.25)
Weighted average shares outstanding - basic and diluted .       1,013,038        1,013,038

(1) Excludes stock-based compensation expense as follows:
    General and administrative ..........................     $       258      $       258
</TABLE>


     See notes to the unaudited condensed consolidated financial statements.


                                       4
<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                SIX MONTHS ENDED JUNE 30,
                                                              ----------------------------
                                                                  2004             2003
                                                              -----------      -----------
                                                                       (UNAUDITED)

<S>                                                           <C>              <C>
Software license revenues ...............................     $        --      $    37,033
Service revenues ........................................         257,565          235,256
                                                              -----------      -----------
     Total revenues .....................................         257,565          272,289
Costs and expenses:
  Cost of services ......................................         212,969          258,962
  Engineering and development (1) .......................              --            4,205
  Selling and marketing .................................              --            3,843
  General and administrative (1) ........................         325,906          580,850
  Stock-based compensation expense ......................             516            2,338
                                                              -----------      -----------
     Loss from operations ...............................        (281,826)        (577,909)
Interest income .........................................          38,329           57,022
                                                              -----------      -----------
Net loss ................................................     $  (243,497)     $  (520,887)
                                                              ===========      ===========

Net loss per share  - basic and diluted .................     $     (0.24)     $     (0.51)
Weighted average shares outstanding - basic and diluted .       1,013,038        1,013,038

(1) Excludes stock-based compensation expense as follows:
    Engineering and development .........................     $        --      $     1,798
    General and administrative ..........................             516              540
</TABLE>


     See notes to the unaudited condensed consolidated financial statements.


                                       5
<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          SIX MONTHS ENDED JUNE 30,
                                                          -------------------------
                                                             2004           2003
                                                          ---------      ---------
                                                                 (UNAUDITED)

<S>                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................     $(243,497)     $(520,887)
Adjustments to reconcile net loss to net cash used by
  operating activities:
    Depreciation and amortization ...................        80,014        183,525
    Stock-based compensation ........................           516          2,338
    Unrealized investment gains .....................        (1,630)       (42,457)
    Increase (decrease) in cash from the change in:
      Accounts receivable ...........................        (4,795)         1,330
      Prepaid expenses and other current assets .....           447         40,815
      Accounts payable ..............................        81,324         17,000
      Accrued compensation ..........................         1,049          6,246
      Other accrued expenses and current liabilities        (91,540)       (26,429)
      Deferred revenue ..............................        (9,400)            --
                                                          ---------      ---------
          Net cash used by operating activities .....      (187,512)      (338,519)
                                                          ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for short and long-term investments .......            --       (162,704)
Investment maturities ...............................       168,507        240,007
Return of security deposit ..........................           850             --
                                                          ---------      ---------
          Net cash provided by investing activities .       169,357         77,303
                                                          ---------      ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS ...........       (18,155)      (261,216)
CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD ............................................       317,444        425,369
                                                          ---------      ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ............     $ 299,289      $ 164,153
                                                          =========      =========
</TABLE>


     See notes to the unaudited condensed consolidated financial statements.


                                       6
<PAGE>

                         MANGOSOFT, INC. AND SUBSIDIARY

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF BUSINESS AND BASIS OF PRESENTATION

     MangoSoft, Inc. and subsidiary (the "Company") markets, sells and supports
Internet business software and services that improve the utility and
effectiveness of Internet-based business applications. The Company's software
solutions address the networking needs of small businesses, workgroups and large
enterprises. The Company is engaged in a single operating segment of the
computer software industry.

     The accompanying unaudited condensed consolidated financial statements have
been prepared on the same basis as the annual financial statements. In the
opinion of management, all significant adjustments, which are normal, recurring
in nature and necessary for a fair presentation of the financial position, cash
flows and results of the operations of the Company, have been consistently
recorded. The operating results for the interim periods presented are not
necessarily indicative of expected performance for the entire year. Certain
amounts from the prior year have been reclassified to conform to the current
year presentation.

     The unaudited information should be read in conjunction with the audited
financial statements of the Company and the notes thereto for the year ended
December 31, 2003 included in the Company's Annual Report on Form 10-KSB filed
with the Securities and Exchange Commission.

     As shown in the unaudited condensed consolidated financial statements,
during the six months ended June 30, 2004 and 2003, the Company incurred net
losses of $(243,497) and $(520,887), respectively. Cash used in operations
during the six months ended June 30, 2004 and 2003 was $187,512 and $338,519,
respectively. These factors, among others, raise significant doubt about the
Company's ability to continue as a going concern. The unaudited condensed
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern. The Company's continuation as a going concern is dependent upon
its ability to generate sufficient cash flow and meet its obligations on a
timely basis and ultimately attain profitability.

2.   NET LOSS PER SHARE

     Basic net loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding for the period. Diluted net loss per
share reflects, in addition to the weighted average number of common shares, the
potential dilution if stock options and warrants outstanding were exercised
and/or converted into common stock, unless the effect of such equivalent shares
was antidilutive.

     For the six months ended June 30, 2004 and 2003, the effect of stock
options and other potentially dilutive shares were excluded from the calculation
of diluted net loss per common share, as their inclusion would have been
antidilutive.

3.   REVENUE RECOGNITION

     The Company records revenue upon delivery if pervasive evidence of an
arrangement exists, the price is fixed and determinable, delivery has occurred
and collection is probable. Revenue for sales to distributors is recognized upon
sales to end-users. Service revenue is recognized as services are performed.

     In December 2003, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 104, "Revenue Recognition," which superceded SAB
101, "Revenue Recognition in Financial Statements" and Emerging Issues Task


                                       7
<PAGE>

Force Extract No. 00-21, "Revenue Arrangements with Multiple Deliverables." The
adoption of SAB No. 104 did not have a material impact on the Company's results
of operations or financial position.

4.   STOCK-BASED COMPENSATION

     The Company currently has one stock-based compensation plan, which is
described more fully in Note 8 in the Company's Annual Report on Form 10-KSB for
the period ended December 31, 2003, as filed on March 26, 2004. As amended, this
plan provides for the issuance of up to 296,297 shares of common stock to
employees, officers, directors and consultants in the form of nonqualified and
incentive stock options, restricted stock grants or other stock-based awards,
including stock appreciation rights. The stock options are exercisable as
specified at the date of grant and expire no later than ten years from the date
of grant. As of June 30, 2004, there were 210,466 remaining options available
under this plan.

     The following table illustrates the effect on net loss and net loss per
share if the Company applied the fair value recognition provision of SFAS No.
123 to stock-based employee compensation:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                   THREE MONTHS ENDED JUNE 30,      SIX MONTHS ENDED JUNE 30,
---------------------------------------------------------------------------------------------------------------
                                                      2004            2003            2004            2003
                                                   ----------      ----------      ----------      ----------

<S>                                                <C>             <C>             <C>             <C>
Net loss as reported .........................     $  (99,166)     $ (252,800)     $ (243,497)     $ (520,887)
Add back stock-based compensation included in
the determination of net loss as reported ....            258             258             516           2,338
Less stock-based compensation had all options
been recorded at fair value ..................        (29,283)        (29,283)        (58,566)        (72,900)
                                                   ----------      ----------      ----------      ----------

Adjusted net loss ............................     $ (128,191)     $ (281,825)     $ (301,547)     $ (591,449)
                                                   ==========      ==========      ==========      ==========

Weighted average shares outstanding, basic and
diluted ......................................      1,013,038       1,013,038       1,013,038       1,013,038

Net loss per share, basic and diluted, as
reported .....................................     $    (0.10)     $    (0.25)     $    (0.24)     $    (0.51)
                                                   ==========      ==========      ==========      ==========

Adjusted net loss per share, basic and
diluted ......................................     $    (0.13)     $    (0.28)     $    (0.30)     $    (0.58)
                                                   ==========      ==========      ==========      ==========

---------------------------------------------------------------------------------------------------------------
</TABLE>


                                       8
<PAGE>

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

     This Quarterly Report on Form 10-QSB contains forward-looking statements
within the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Any statements in this Quarterly Report that are not statements of
historical facts are forward-looking statements, which involve risks and
uncertainties. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. Our actual results may differ materially
from those indicated in the forward-looking statements as a result of the
factors set forth elsewhere in this Quarterly Report on Form 10-QSB, including
under "Risk Factors." You should read the following discussion and analysis
together with our condensed consolidated financial statements for the periods
specified and the related notes included herein. Further reference should be
made to our Annual Report on Form 10-KSB for the period ended December 31, 2003
filed with the Securities and Exchange Commission.

OVERVIEW

     We market, sell and support Internet business software and services that
improve the utility and effectiveness of Internet-based business applications.
Our software solutions address the networking needs of small businesses,
workgroups and large enterprises. Our products and services enhance the
performance of PC networks and deliver improved service utilizing existing
equipment. We no longer develop new software products or services.

     Mangomind(SM) is a multi-user, business-oriented, peer-to-peer file sharing
system, allowing individual users to collaborate over the Internet across
organizational boundaries in a safe and secure manner. The architecture is a
blend of the manageability of client/server with the autonomy, clustering, and
caching optimizations of peer-to-peer. The user experience is one of easy file
sharing with colleagues through what looks like an ordinary LAN shared drive.
Mangomind(SM) provides the secure file sharing benefits of a VPN without
additional hardware and configuration complexities. Mangomind(SM) is sold as
both a service and a standalone software product.

     fileTRUST(SM) is an online data storage service we purchased from
FleetBoston in February 2002 for approximately $427,000, of which $175,000 was
paid in cash and the balance in our common stock and warrants to purchase our
common stock at $14.31 per share. fileTRUST(SM) users can access their stored
files from any Internet-connected system. The fileTRUST(SM) service complements
our MangomindSM service by providing customers with a lower cost online storage
system. In conjunction with our purchase of fileTRUST(SM), we executed a
two-year enterprise license agreement with FleetBoston for the internal use of
fileTRUST(SM) by FleetBoston, which expired in February 2004. The terms and
conditions of this agreement provide for automatic renewals on a month-to-month
basis. We were notified by FleetBoston that, effective September 2004, it will
terminate its license agreement with us. We recorded approximately $455,000 in
net revenues from the inception of this agreement through June 30, 2004.

     Net revenues from FleetBoston during the three and six month periods ended
June 30, 2004 were approximately $60,000 and $110,000 , respectively. We are
actively seeking new business opportunities to replace this lost revenue. If we
are unable to replace this revenue, our operations may be adversely affected. We
are also investigating other means of cost reductions to lessen the adverse
effects of this loss of revenue.


                                       9
<PAGE>

CRITICAL ACCOUNTING POLICIES

     Our accounting policies are described in our Annual Report on Form 10-KSB
for the period ended December 31, 2003 filed with the Securities and Exchange
Commission. The following describes the application of accounting principles
that have a significant impact on our consolidated financial statements:

     Going Concern Assumption - The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary
should we be unable to continue as a going concern. If the consolidated
financial statements were prepared on liquidation basis, the carrying value of
our assets and liabilities would be adjusted to net realizable amounts. In
addition, the classification of the assets and liabilities would be adjusted to
reflect the liquidation basis of accounting.

     Revenue Recognition - We recognize revenue generated from product sales
when persuasive evidence of an arrangement exists, the price is fixed and
determinable, delivery has occurred and collection is probable. We recognize
revenue generated from the sale of the Mangomind(SM) and fileTRUST(SM) services
as the service is provided. We recognize revenue generated from the sale of the
Mangomind(SM) product over the period of the first year's maintenance agreement
when persuasive evidence of the arrangement exists, the price is fixed and
determinable, delivery and any required installation has been completed and
collection is probable.

     Investments - At June 30, 2004, we have approximately $621,000 invested in
several high-yield, secured corporate notes with related parties to better
maximize our rate of return on our cash. These investments represent a
significant portion of our total assets at June 30, 2004. These investments are
classified as held-to-maturity and are carried at their amortized cost.
Investments and maturities of less than one year are classified as short-term
investments.

     Stock-based Compensation - As part of our compensation programs offered to
our employees, we grant stock options. In addition, we have engaged third-party
consultants and advisors and have compensated them in the form of stock options.
Compensation for stock options issued to employees is generally measured as the
difference between the exercise price of the options granted and the fair value
of our common stock on the date of grant. Compensation for stock options issued
to third-party consultants and advisors is measured at the fair value on the
date of grant, determined using the Black-Scholes valuation model. Because of
the cashless exercise feature of the stock options granted in 1999 and the
repricing of options granted in 2000 and 2003, we are required to remeasure the
compensation related to these awards at each reporting date. As the quoted
market price of our common stock fluctuates, our reported operating expenses
will continue to fluctuate. These fluctuations can be significant.

     Deferred Taxation - Because of the significant operating losses incurred
and projected future operating losses, we have provided a full valuation
allowance against the deferred tax assets created by our net operating loss
carryforwards.

COSTS AND EXPENSES

     Cost of services - Cost of services consist solely of the expenses we incur
to administer and service the Mangomind(SM) and fileTRUST(SM) services. These
expenses consist primarily of salaries and related personnel costs, the cost of
our outsourced data center, the license royalties we pay to our e-security
software provider for the encryption used in the Mangomind(SM) service and the
fees we pay to Built Right Networks to manage our billable services
infrastructure.


                                       10
<PAGE>

     Engineering and Development Expenses - Engineering and development expenses
consist primarily of costs related to the design, development, testing,
deployment and enhancement of our products and services. We have expensed our
engineering and development costs as incurred. At June 30, 2004, there were no
full time employees performing engineering or development on our products and
services. Effective September 30, 2002, we have outsourced the maintenance of
our billable services infrastructure as well as product and customer support to
Built Right Networks.

     Other Operating Expenses - Selling and marketing expenses consist primarily
of costs incurred to market our products and services such as the costs of
attending and presenting at trade shows. General and administrative expenses
consist primarily of salaries and related personnel costs and other general
corporate costs such as facility costs, commercial and general liability
insurance, accounting and legal expenses and other costs typical of a publicly
held corporation. At June 30, 2004, there were no full time employees performing
selling and marketing activities. Our remaining two employees are performing
general and administrative activities.

     Reduction in Force - We have reduced our work force on four occasions since
April 23, 2001 due to adverse economic conditions and our need to conserve
capital. At June 30, 2004, we had two employees, each working in a general and
administrative capacity.

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2004 AND 2003

     Revenues for the three months ended June 30, 2004 increased $1,948 or 1% to
$133,269 from $131,321 for the comparable period in 2003. The increase in our
revenues was attributable to the increase in service revenue of $17,582 offset
by a $15,634 decrease in software license revenue over the two periods. One
customer, FleetBoston represented approximately 45% of our revenues for the
three-month period ended June 30, 2004. In 2003, FleetBoston and New York Life
Insurance Company ("New York Life") accounted for approximately 38% and 22% of
our revenues, respectively. We were notified by FleetBoston that, effective
September 2004, it will terminate its February 2002 enterprise license agreement
with us. We are investigating options to replace the loss of this revenue. No
other customer accounted for more than 10% of our revenues for either period.

     We recognized $66,468 from the sale of our Mangomind(SM) service and
$66,801 from the sale of our fileTRUST(SM) service during the three months ended
June 30, 2004. During the same period in 2003, we recognized $62,657 from the
sale of our Mangomind(SM) service and $53,030 from the sale of our fileTRUST(SM)
service.

     Cost of services for the three months ended June 30, 2004 decreased $31,946
or 24% to $99,149 compared to $131,095 for the comparable period in 2003. The
decrease in the cost of delivering our services was primarily a result of
continued overhead reductions and our switch to a lower cost data center. In
response to our loss of FleetBoston as a customer, we are working closely with
key vendors and service providers, including Built Right Networks, to
restructure our business relationships to lessen the adverse effects of the loss
of the FleetBoston revenues.

     There was no engineering and development expense for the three-month period
ended June 30, 2004. In the comparable period in 2003, engineering and
development expense was $839. During the three-month periods ended June 30, 2004
and 2003, we had no full-time employees performing engineering or development
activities.


                                       11
<PAGE>

     For the three-month period ended June 30, 2004, other operating expenses
including selling and marketing and general and administrative expenses
decreased $134,726 or 48% to $148,434 compared with $283,160 for the comparable
period in 2003. The decrease in other operating expenses was due primarily to
our reduced spending in the areas of marketing and sales consultants, public
relations, legal and other corporate consultants and facility rent in addition
to reductions in our marketing, selling and general and administrative personnel
associated with our work force reductions. During the three-month period ended
June 30, 2004, each of our two (2) full-time employees were working in a general
and administrative capacity.

     Stock-based compensation expense of $258 was recorded for both the
three-month period ended June 30, 2004 and 2003. The expense represents the
ratable recognition of stock-based compensation for stock option awards granted
in 2000 at exercise prices that were less than the fair value at the time of
grant. See note 4 to the condensed consolidated financial statements.

     Our loss from operations decreased $169,459 to $114,572 for the three-month
period ended June 30, 2004 compared with a loss from operations of $284,031 for
the comparable period in 2003 as a result of the above factors.

       Interest income decreased $15,825 to $15,406 for the three months ended
June 30, 2004 compared to $31,231 for the three months ended June 30, 2003. Our
cash balances available for investment have decreased period over period,
however we have invested approximately $621,000 in several high-yield, secured
corporate notes that deliver greater returns than our pervious interest-bearing
cash accounts.

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2004 AND 2003

     Revenues for the six months ended June 30, 2004 decreased $14,724 or 5% to
$257,565 from $272,289 for the comparable period in 2003. The decrease in our
revenues was attributable to a $22,309 increase in service revenue offset by a
$37,033 decrease in software license revenue over the two periods. One customer,
FleetBoston represented approximately 43% of our revenues for the six-month
period ended June 30, 2004. We were notified by FleetBoston that, effective
September 2004, it will terminate its February 2002 enterprise license agreement
with us. We are investigating options to replace the loss of this revenue. In
2003, FleetBoston and New York Life Insurance Company ("New York Life")
accounted for approximately 35% and 21% of our revenues, respectively. No other
customer accounted for more than 10% of our revenues for either period.

     We recognized $131,912 from the sale of our Mangomind(SM) service and
$125,653 from the sale of our fileTRUST(SM) service during the six months ended
June 30, 2004. During the same period in 2003, we recognized $130,882 from the
sale of our Mangomind(SM) service and $104,374 from the sale of our
fileTRUST(SM) service.

     Cost of services for the six months ended June 30, 2004 decreased $45,993
or 18% to $212,969 from $258,962 for the comparable period in 2003. The decrease
in the cost of delivering our services was primarily a result of continued
overhead reductions and our switch to a lower cost data center. In response to
our loss of FleetBoston as a customer, we are working closely with key vendors
and service providers, including Built Right Networks, to restructure our
business relationships to lessen the adverse effects of the loss of the
FleetBoston revenues.

     There was no engineering and development expense for the six-month period
ended June 30, 2004. In the comparable period in 2003, engineering and
development expense was $4,205. During the six-month periods ended June 30, 2004
and 2003, we had no full-time employees performing engineering or development
activities.


                                       12
<PAGE>

      For the six-month period ended June 30, 2004, other operating expenses
including selling and marketing and general and administrative expenses
decreased $258,787 or 44% to $325,906 compared with $584,693 for the comparable
period in 2003. The decrease in other operating expenses was due primarily to
our reduced spending in the areas of marketing and sales consultants, public
relations, legal and other corporate consultants and facility rent in addition
to reductions in our marketing, selling and general and administrative personnel
associated with our work force reductions. During the six-month period ended
June 30, 2004, each of our two (2) full-time employees were working in a general
and administrative capacity.

     We recorded $516 in stock-based compensation expense over the six-month
period ended June 30, 2004 compared to $2,338 for the comparable period in 2003.
The decrease in this expense was primarily attributable to the decrease in the
number of outstanding employee stock options subject to compensation expense.
See note 4 to the condensed consolidated financial statements.

     Our loss from operations decreased $296,083 to $281,826 for the six-month
period ended June 30, 2004 compared with a loss from operations of $577,909 for
the comparable period in 2003 as a result of the above factors.

     Interest income decreased $18,693 to $38,329 for the six months ended June
30, 2004 compared to $57,022 for the six months ended June 30, 2003. Our cash
balances available for investment have decreased period over period, however we
have invested approximately $621,000 in several high-yield, secured corporate
notes that deliver greater returns than our pervious interest-bearing cash
accounts.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     We were formed in June 1995 and since our formation have raised
approximately $74,250,000 in financing from private placements of debt and
equity securities. In addition to the financing we received through the sale of
our securities, we have, at times, depended on loans from stockholders and
directors and credit from suppliers to meet our interim financing needs.
Borrowings from stockholders and directors have generally been refinanced with
new debt instruments or converted into additional equity. At June 30, 2004,
approximately $1,010,000 in additional financing was provided through accounts
payables, accrued expenses and other trade credit, a significant portion of
which is past due.

     At June 30, 2004, we had a cash balance of approximately $299,000 and a
working capital deficiency of approximately $68,000. Excluding our Nashua, NH
facility lease which expires in November 2004, we do not have any commercial
commitments or off balance sheet financing. Our commitments under our operating
leases are described in Note 10 to our consolidated financial statements filed
on Form 10-KSB for the period ended December 31, 2003, as reported to the SEC.

     At June 30, 2004, we had approximately $621,000 invested in several
high-yield short-term investments with related parties. Approximately $123,000
of the corporate notes receivable outstanding at June 30, 2004 were issued to
Plaintiff Funding Corporation, a privately held corporation in which Selig Zises
is a stockholder. In addition, a corporate note with a remaining balance at June
30, 2004 of approximately $46,000, was issued to LawCash II LLC, a privately
held company in which Selig Zises is a member. At June 30, 2004, two corporate
notes receivable totaling approximately $452,000 were due from Unicrown Partners
LLC, a privately held company in which Selig Zises and Jay Zises are members.
Selig Zises and Jay Zises are stockholders of MangoSoft, Inc. Selig Zises was
the former co-chairman of our Board of Directors. Investments in high-yield
securities pose higher risks than investments in lower-yield securities,
including the risk of total loss.


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<PAGE>

    We did not make any capital expenditures during the six months ended June
30, 2004.

    We have significantly modified our operations and reduced our work force on
four separate occasions since April 2001. We currently have two (2) employees,
each working in a general and administrative capacity. We outsource the
management of our billable services infrastructure, software code base, customer
support and reseller channel management to Built Right Networks for
approximately $30,000 per month, under a September 30, 2002 agreement, which can
be cancelled with a ninety (90) day notice. We are currently negotiating with
Built Right Networks to restructure our September 30, 2002 agreement in response
to our loss of the FleetBoston revenues.

     Unless we can generate significant on-going revenue, we will need
additional sources of equity or debt financing. Although we have been successful
in raising past financing, there can be no assurances that additional financing
will be available to us on commercially reasonable terms, or at all.

     As shown in the unaudited condensed consolidated financial statements,
during the six months ended June 30, 2004 and 2003, we incurred net losses of
$243,497 and $520,887, respectively. Cash used in operations during the six
months ended June 30, 2004 and 2003 was $187,512 and $338,519, respectively. The
factors, among others, raise significant doubt about our ability to continue as
a going concern. Our continuation as a going concern is dependent upon our
ability to generate sufficient cash flow and meet our obligations on a timely
basis and ultimately attain profitability.


                                       14
<PAGE>

RISK FACTORS

We Have A Limited Operating History And A History Of Substantial Operating
Losses.

     We have a history of substantial operating losses and an accumulated
deficit of $88,669,284 as of June 30, 2004. For the six months ended June 30,
2004 and the year ended December 31, 2003, our net losses were $243,497 and
$926,644, respectively. We have historically experienced cash flow difficulties
primarily because our expenses have exceeded our revenues. We expect to incur
additional operating losses. These factors, among others, raise significant
doubt about our ability to continue as a going concern. If we are unable to
generate sufficient revenue from our operations to pay expenses or we are unable
to obtain additional financing on commercially reasonable terms, our business,
financial condition and results of operations will be materially and adversely
affected.

We May Need Additional Financing.

     We may require additional capital to finance our future operations. We can
provide no assurance that we will obtain additional financing sufficient to meet
our future needs on commercially reasonable terms or otherwise. If we are unable
to obtain the necessary financing, our business, operating results and financial
condition will be materially and adversely affected.

Our Success Depends On Our Outsourced Services Agreement.

     Effective September 30, 2002, we outsourced the management of our internal
information systems, billable services infrastructure, software code base,
customer support and reseller channel management to Built Right Networks under
our September 30, 2002 Information Management Services Agreement (the
"Outsourced Services Agreement"). The principals of Built Right Networks are all
former MangoSoft employees. Our contract represents a large majority of Built
Right Networks' revenue. We can provide no assurance that Built Right Networks
will remain solvent or can retain their key personnel. Built Right Network's
inability to retain key personnel or to remain solvent would have a material and
adverse effect on our business, financial condition and results of operations.

Our High-Yield Investments Could Become Impaired.

     We have approximately $621,000 invested in high-yield, secured corporate
notes with related parties. These investments represent a significant portion of
our total assets at June 30, 2004. Investments in high-yield corporate notes
entail a higher risk of delinquency or even complete loss. No assurance can be
given that we will not experience any losses or that our debtors will timely
remit on the maturity of these notes. If we experience any loss or impairment on
these investments, our business, financial condition and results of operations
will be materially and adversely affected.

We Have Limitations On The Effectiveness Of Our Internal Controls.

     We have two full-time employees, each engaged in general and administrative
capacity. A complete set of internal controls is not possible in an organization
of this size. Management does not expect that its disclosure controls or its
internal controls will prevent all errors and intentional misrepresentations. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control


                                       15
<PAGE>

systems, no evaluation of controls can provide absolute assurance that all
control issues, if any, within the organization have been detected.

SEC Rules Concerning Sales Of Low-Priced Securities May Hinder Re-Sales Of Our
Common Stock

     Because our common stock has a market price that is less than five dollars
per share, our common stock is not listed on an exchange or quoted on Nasdaq and
is traded on the OTC Bulletin Board. Brokers and dealers who handle trades in
our common stock are subject to certain SEC disclosure rules when effecting
trades in our common stock, including disclosure of the following: the bid and
offer prices of our common stock, the compensation of the brokerage firm and the
salesperson handling a trade and legal remedies available to the buyer. These
requirements may hinder re-sales of our common stock and may adversely affect
the market price of our common stock.

There May Be Limited Liquidity In Our Common Stock And Its Price May Be Subject
to Fluctuation.

     Our common stock is currently traded on the OTC Bulletin Board and there is
only a limited market for our common stock. We can provide no assurances that we
will be able to have our common stock listed on an exchange or quoted on Nasdaq
or that it will continue to be quoted on the OTC Bulletin Board. If there is no
trading market for our common stock, the market price of our common stock will
be materially and adversely affected.

Our Performance Depends On Market Acceptance Of Our Products.

     We expect to derive a substantial portion of our future revenues from the
sales of Mangomind(SM) and fileTRUST(SM). Due to our small size and need to
conserve capital, our selling and marketing activities for these products and
services is limited. If markets for our products fail to develop, develop more
slowly than expected or are subject to substantial competition and we are unable
to replace the revenues we lost as a result of FleetBoston's termination of its
February 2002 enterprise license agreement with us, our business, financial
condition and results of operations may be adversely affected.

We Depend On Strategic Marketing Relationships.

     We expect our future marketing efforts will focus in part on developing
business relationships with technology companies that seek to augment their
businesses by offering our products to their customers. Our inability to enter
into and retain strategic relationships, or the inability of such technology
companies to effectively market our products, could materially and adversely
affect our business, operating results and financial condition.

Rapidly Changing Technology And Substantial Competition May Adversely Affect Our
Business.

     Our business is subject to rapid changes in technology. We can provide no
assurances that research and development by competitors will not render our
technology obsolete or uncompetitive. We compete with a number of computer
hardware and software design companies that have technologies and products
similar to those offered by us and have greater resources, including more
extensive research and development, marketing and capital than us. We can
provide no assurances that we will be successful in marketing our existing
products and developing and marketing new products in such a manner as to be
effective against our competition. If our technology is rendered obsolete or we
are unable to compete effectively, our business, operating results and financial
condition will be materially and adversely affected.


                                       16
<PAGE>

Litigation Concerning Intellectual Property Could Adversely Affect Our Business.

     We rely on a combination of trade secrets, copyright and trademark law,
contractual provisions, confidentiality agreements and certain technology and
security measures to protect our trademarks, patents, proprietary technology and
know-how. However, we can provide no assurance that our rights in our
intellectual property will not be infringed upon by competitors or that
competitors will not similarly make claims against us for infringement. If we
are required to be involved in litigation involving intellectual property
rights, our business, operating results and financial condition will be
materially and adversely affected.

Defects In Our Software Products May Adversely Affect Our Business.

     Complex software such as the software developed by MangoSoft may contain
defects when introduced and also when updates and new versions are released. Our
introduction of software with defects or quality problems may result in adverse
publicity, product returns, reduced orders, uncollectible or delayed accounts
receivable, product redevelopment costs, loss of or delay in market acceptance
of our products or claims by customers or others against us. Such problems or
claims may have a material and adverse effect on our business, financial
condition and results of operations.


                                       17
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

         We have significantly reduced our work force on several occasions
during 2001 and 2002. At June 30, 2004 and 2003, we had two (2) employees,
including Mr. Dale Vincent, our President, Chief Executive Officer and sole
director. A complete set of internal controls including segregation of duties is
not possible in an organization of this size. However, we have implemented
control procedures surrounding the maintenance of our accounting and financial
systems and the safeguarding of our assets. Further, all transactions entered
into outside the normal course of our day-to-day operations must be approved by
Mr. Vincent.

     Our principal executive and financial officer has evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), as of the end of the period covered by this Quarterly
Report on Form 10-QSB. Based on such evaluation, our principal executive and
financial officer has concluded that as of such date, our disclosure controls
and procedures were designed to ensure that information required to be disclosed
by us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
applicable SEC rules and forms and were effective.

         There was no change in our internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
occurred during the quarter ended June 30, 2004 that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.


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<PAGE>

                           PART II - OTHER INFORMATION

ITEM 2.  LEGAL PROCEEDINGS

     On December 6, 2002, the Company filed a notification on Form 8-K that on
November 22, 2002, it filed a complaint in the United States District Court of
New Hampshire, against Oracle Corporation for infringement of U.S. Patent No.
6,148,377 and U.S. Patent No. 5,918,229.

     On June 4, 2003, the Company filed a notification on Form 8-K that on May
15, 2003, Oracle Corporation filed a complaint in the United States District
Court, Northern District of California, against the Company and Built Right
Networks for infringement of a patent held by Oracle Corporation. The complaint
seeks unspecified monetary damages and injunctive relief and awards for
interest, costs and attorneys' fees.

     On July 17, 2003, the Company filed notification on Form 8-K that on July
2, 2003, it filed a complaint in the United States District Court, Northern
District of California, against Oracle Corporation, Sun Microsystems, Inc., Dell
Computer Corporation and Electronic Arts, Inc. for infringement of U.S. Patent
No. 6,148,377 and U.S. Patent No. 5,918,229.

     Other than the matter listed above, there are no material pending legal
proceedings, other than the routine litigation occurring in the normal course of
operations, to which we are party or of which any of our properties are subject.


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<PAGE>

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)    EXHIBITS:

      NUMBER                                 DESCRIPTION OF EXHIBIT

         2.1        Agreement and Plan of Merger by and among First American
                    Clock Co., MangoSoft Corporation and MangoMerger Corp.,
                    dated as of August 27,1999. (1)
         3.1        Articles of Incorporation, as amended. (2)
         3.2        By-laws. (2)
         4.1        Rights Plan. (6)
          10        Lease of Westborough Office Park, Building Five, dated
                    November 10, 1995. (3) 14 Code of Ethics. (7)
          21        Subsidiary of the Registrant. (2)
        31.1        Certification of Principal Executive Officer required by
                    Rule 13a 14(a) or Rule 15-d14 (a) of the Securities Exchange
                    Act of 1934, as adopted pursuant to Section 302 of the
                    Sarbanes-Oxley Act of 2002.
        32.1        Certification of Chief Executive Officer pursuant to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002.
        99.1        1999 Incentive Compensation Plan, as amended and restated on
                    May 1, 2000. (1)
        99.2        Form of Subscription Agreement for purchase of common stock,
                    dated as of March 20, 2000. (1)
        99.3        Form of Warrant Agreement. (1)
        99.4        Asset Purchase Agreement, dated February 11, 2002, between
                    MangoSoft, Inc. and Fleet National Bank. (4)
        99.5        Warrant Agreement, dated February 11, 2002, between
                    MangoSoft, Inc. and Fleet National Bank. (4)
        99.6        Information Management Services Agreement, dated September
                    30, 2002, between MangoSoft, Inc. and Built Right Networks
                    LLC. (5)
        99.7        Rights Agreement, dated March 14, 2003, between MangoSoft,
                    Inc. and Interwest Transfer Co., Inc. (6)

(1)  Filed as an exhibit to our Current Report on Form 8-K for an event dated
     September 7, 1999 and hereby incorporated by reference thereto.

(2)  Filed as an exhibit to our Registration Statement on Form 10-SB, filed June
     9, 2000, and hereby incorporated by reference thereto.

(3)  Filed as an exhibit to our Quarterly Report filed November 9, 1999 for the
     quarter ended September 30, 1999 and hereby incorporated by reference
     thereto.

(4)  Filed as an exhibit to our Quarterly Report filed August 14, 2002 for the
     quarter ended June 30, 2002 and hereby incorporated by reference thereto.

(5)  Filed as an exhibit to our Current Report on Form 8-K for an event dated
     September 30, 2002 and hereby incorporated by reference thereto.

(6)  Filed as an exhibit to our Current Report on Form 8-K for an event dated
     March 21, 2003 and hereby incorporated by reference thereto.

(7)  Filed as an exhibit to our Annual Report filed on March 26, 2004 for the
     year ended December 31, 2003 and hereby incorporated by reference thereto.


                                       20
<PAGE>

REPORTS ON FORM 8-K:

There were no notifications filed on Form 8-K during the six months ended June
30, 2004.



                                       21
<PAGE>


                                   SIGNATURES


     Pursuant to the requirements 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.


August 13, 2004                         MANGOSOFT, INC.

                                        /s/ DALE VINCENT
                                        ---------------------------------------
                                            Dale Vincent
                                            Chief Executive Officer
                                            (Principal Financial and Accounting
                                             Officer)



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