**UNITED
        STATES**
  **SECURITIES
        AND EXCHANGE COMMISSION**
  **Washington,
        DC 20549**
 
 **FORM
        10-Q**
 
 **x**  **Quarterly
        Report Pursuant to Section 13 or 15(** **d** **)
        of the Securities Exchange Act of 1934.**
 
 **For
        the Quarterly Period Ended March 31, 2008**
 
 **Commission
        File Number: 000-30781**
 
 **MANGOSOFT,
        INC.**
 (Exact
        name of small business issuer as specified in its charter)
 
 **Nevada**
              **87-0543565**(State
                  or other jurisdiction
              (IRS
                  Employer Identification No.)of
                  incorporation or organization)**29
                  Riverside St., Ste A Box 8****Nashua,
                  NH**
              **03062**(Address
                  of principal executive offices)
              (Zip
                  code)
 
 **Issuer’s
        telephone number: (603) 324-0400**
 
 
 Indicate
        by check mark whether the Registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months, and (2) has been subject to such filing requirements
        for
        the past 90 days. Yes x No o
 
 Indicate
        by check mark whether the Registrant is a large accelerated filer, an
        accelerated filer, a non-accelerated filer or a smaller reporting company.
        See
        the definitions of “large accelerated filer,” “accelerated filer” and “smaller
        reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large
                accelerated filer o
              Accelerated
                  filer o
 Non-accelerated
                  filer (Do not check if a smaller reporting company) o
                Smaller
                    reporting company x
  Indicate
        by check mark whether the Registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes oNo
x
 
 As
        of May
        15, 2008, 5,443,157 shares of the Registrant’s common stock, par value $0.001
        per share, were outstanding.
  
  
  **MANGOSOFT,
        INC. AND SUBSIDIARIES**
 
 **INDEX**
 
 PagePART
                  I.FINANCIAL
                  INFORMATIONITEM
                  1 –
                  Condensed Consolidated Financial Statements (Unaudited):Balance
                  Sheets as of March 31, 2008 and December 31, 2007
              3Statements
                  of Operations for the Three Months Ended March 31, 2008 and
                  2007
              4Statements
                  of Cash Flows for the Three Months Ended March 31, 2008 and
                  2007
              5Notes
                  to Unaudited Condensed Consolidated Financial Statements
              6ITEM
                  2 – Management’s Discussion and Analysis of Financial Condition and
                  Results of Operations
              9ITEM
                  3 – Quantitative and Qualitative Disclosures About Market
                  Risk
              13ITEM
                  4 – Controls and Procedures
              13PART
                  II.OTHER
                  INFORMATIONITEM
                  1 – Legal Proceedings
              14ITEM
                  1a. – Risk Factors
              15ITEM
                  6 – Exhibits and Reports on Form 8-K
              18Signature
              20Officer
                  Certification
              21
  2
 
 **MANGOSOFT,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**
  **March 31,**
              
              **December 31,****2008**
              
              **2007****(Unaudited)****ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              $
              1,102,481
              
              $
              318,065Accounts
                  receivable
              
              5,750
              
              
              20,607Total
                  assets
              $
              1,108,231
              
              $
              338,672**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY**Current
                  Liabilities:Accounts
                  payable
              $
              158,465
              
              $
              114,566Accrued
                  compensation
              
              7,788
              
              
              7,788Other
                  accrued expenses and current liabilities
              
              21,088
              
              
              41,609Total
                  current liabilities
              
              187,341
              
              
              163,963Stockholders’
                  Equity:Preferred
                  stock - $.001 par value; authorized, 5,000,000shares;
                  issued and outstanding, 20,000
              
              20
              
              
              20Common
                  stock - $.001 par value, authorized 15,000,000 shares in March
                  2008 and
                  December 2007; issued and outstanding, 5,443,157 in March 2008
                  and
                  3,413,038 in December 2007
              
              5,443
              
              
              3,413Additional
                  paid-in capital
              
              90,926,273
              
              
              89,904,757Accumulated
                  deficit
              
              (90,010,846
              )
              
              (89,733,481
              )Total
                  stockholders' equity
              
              920,890
              
              
              174,709Total
                  liabilities and stockholders' equity
              $
              1,108,231
              
              $
              338,672
  See
        notes
        to the unaudited condensed consolidated financial statements.
  3
 
 **MANGOSOFT,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 
 **Three Months Ended March 31,****2008**
              
              **2007****(Unaudited)**Service
                  revenues
              
              $
              65,607
              
              $
              61,931Costs
                  and expenses:Cost
                  of services
              
              
              65,601
              
              
              64,742General
                  and administrative
              
              
              281,642
              
              
              119,298Loss
                  from operations
              
              
              (281,636
              )
              
              (122,109
              )Interest
                  income
              
              
              4,271
              
              
              9,135Net
                  loss
              
              $
              (277,365
              )
              $
              (112,974
              )Net
                  loss per share – basic and diluted
              
              $
              (0.07
              )
              $
              (0.04
              )Weighted
                  average shares outstanding –
                  basic and
                  diluted
              
              
              4,149,235
              
              
              3,146,371
  See
        notes
        to the unaudited condensed consolidated financial statements.
  4
 
 **MANGOSOFT,
        INC. AND SUBSIDIARIES**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **Three Months Ended March 31,****2008**
              
              **2007****(Unaudited)**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (277,365
              )
              $
              (112,974
              )Adjustments
                  to reconcile net loss to net cash used byoperating
                  activities:Increase
                  (decrease) in cash from the change in:Accounts
                  receivable
              
              
              14,857
              
              
              12,903Accounts
                  payable
              
              
              43,899
              
              
              (29,875
              )Accrued
                  compensation
              
              
              -
              
              
              (3,894
              )Other
                  accrued expenses
              
              
              (20,521
              )
              
              (10,309
              )Net
                  cash used in operating activities
              
              
              (239,130
              )
              
              (144,149
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Net
                  Proceeds from Private Placement of Common Stock
              
              
              1,023,546
              
              
              925,000Net
                  cash provided by financing activities
              
              
              1,023,546
              
              
              925,000NET
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              784,416
              
              
              780,851CASH
                  AND CASH EQUIVALENTS, BEGINNING OFPERIOD
              
              
              318,065
              
              
              125,348CASH
                  AND CASH EQUIVALENTS, END OF PERIOD
              
              $
              1,102,481
              
              $
              906,199
  See
        notes
        to the unaudited condensed consolidated financial statements.
  5
 
 **MANGOSOFT,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 
 **1.**
              **NATURE
                  OF BUSINESS AND BASIS OF
                  PRESENTATION**
 
 MangoSoft,
        Inc. and subsidiaries (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,
        2007 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
        three
        months ended March 31, 2008 and 2007, the Company incurred net losses of
        $277,365 and $112,974 respectively. Cash used in operations during the three
        months ended March 31, 2008 and 2007 was $239,130 and $144,149, 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.
 
 On
        September 11, 2006, Mangosoft Corp. assigned the ownership and legal titles
        of
        twelve of its patents and applications with no recorded value to Mangosoft
        Intellectual Property, Inc., (a wholly owned subsidiary), Pursuant to the
        agreement, Mangosoft Corp. assigned the entire right, title, and interest
        in and
        to the following applications to Mangosoft Intellectual Property,
        Inc.:
  **Title**
              
              **Application
                  No./Patent No.**
              
              **Filing
                  Date/Issue Date**System
                  For Tracking Data
              
              08/848,970
              
              05/02/97Method
                  For Scheduling Thread Execution On A Limited Number Operating
                  System
              
              09/069,352
              
              04/29/98Internet-Based
                  Shared File Service With Native PC Client Access And Semantics
                  And
                  Distributed Access Control
              
              09/704,050
              
              11/01/00Internet-Based
                  Shared File Service With Native PC Client Access And
                  Semantics
              
              09/704,262
              
              11/01/00Dynamic
                  Directory Service
              
              10/704,327
              
              11/07/03Internet-Based
                  Shared File Service With Native PC Client Access And Semantics
                  And
                  Distributed Version Control
              
              11/285,423
              
              11/21/05System
                  and Method For Providing Highly Available Data Storage Using Globally
                  Addressable Memory
              
              5,909,540
              
              06/01/99Remote
                  Access And Geographically Distributed Computers In A Globally Addressable
                  Storage Environment
              
              5,987,506
              
              11/16/99Shared
                  Client-Side Web Caching Using Globally Addressable Memory
              
              6,026,474
              
              02/15/00Dynamic
                  Directory Service
              
              6,647,393
              
              11/11/03Distributed
                  Virtual Web Cache Implemented Entirely in Software
              
              6,760,756
              
              07/06/04Internet-Based
                  Shared File Service With Native PC Client Access And
                  Semantics
              
              7,058,696
              
              06/06/06
  6
  On
        January 10, 2007, the Company announced the sale of an aggregate of 2,400,000
        shares of common stock, par value $.001 per share to a group of investors
        led by
        current stockholders. Through the private placement of its common stock,
        the
        Company raised aggregate gross proceeds of $1,200,000. One of the investors
        in
        the offering provided bridge financing to the Company on September 20, 2006
        in
        the principal amount of $250,000. This principal amount and accrued interest
        of
        $6,463, was automatically converted into a subscription for Common Stock
        pursuant to the offering. The Company intends to utilize the net proceeds
        of the
        private placement to pay past due expenses and to fund its various patent
        litigations.
 
 On
        April
        25, 2007, the Company announced that its Mangomind Business Internet File
        Service now supports Microsoft’s Windows Vista. With the addition of Windows
        Vista, Mangomind runs on all of the most commonly used Windows PC business
        platforms, including Windows 97, 98, ME, NT, 2000, XP and Windows Server
        2003.
 
 The
        Company received gross proceeds of approximately $1,023,672 million through
        the
        issuance of common stock pursuant to a rights offering and as a consequence
        issued, commencing on or about February 27, 2008, approximately 2,047,344
        shares
        of its common stock to stockholders who properly exercised their rights in
        the
        rights offering. Pursuant to the rights offering, which concluded as of the
        close of business on February 19, 2008, stockholders of record at the close
        of
        business on December 21, 2007, received, at no charge, a 0.7032 non-transferable
        right for each share of common stock owned by such stockholder on the record
        date. Each full right entitled the holder to purchase one share of the Company's
        common stock at a purchase price of $0.50 per share.
  The
        Company expects to use approximately $750,000 of the net proceeds from the
        rights offering in connection with pursuing various intellectual property
        litigations to enforce the Company’s patent portfolio. The Company anticipates
        using the balance of the net proceeds from the rights offering for working
        capital purposes, including obtaining directors’ and officers’
insurance.
 
 **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
        three months ended March 31, 2008 and 2007, 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.
  7
  **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.
 
 **4.**
                **STOCK-BASED****COMPENSATION**
 
 The
        Company currently has one stock-based compensation plan, which is described
        more
        fully in Note 7 in the Company’s Annual Report on Form 10-KSB for the period
        ended December 31, 2007, as filed on March 30, 2008. 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
        March 31, 2008, there were 179,652 remaining options available under this
        plan.
  Effective
        January 1, 2006, the Company adopted the fair value recognition provisions
        of Statement of Financial Accounting Standards (“SFAS”)
        No. 123(R), *Share-Based Payment* (“SFAS
        123R”), using the modified-prospective-transition method. Under this transition
        method, compensation cost to be recognized for the first three months of
        2006
        would include: (a) compensation cost for all stock-based payments granted,
        but not yet vested as of January 1, 2006, based on the grant-date fair
        value estimated in accordance with the original provisions of SFAS No. 123, *Accounting
        for Stock Based Compensation* ,
        and
        (b) compensation cost for all stock-based payments granted subsequent to
        January 1, 2006, based on the grant-date fair value estimated in accordance
        with the provisions of SFAS 123R. Results
        for prior periods have not been restated. There were no unvested stock based
        payments at January 1, 2006 and there were no stock based payments granted
        during the three months ended March 31, 2008 and 2007.
  8
 
 **ITEM
        2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND** **RESULTS
        OF OPERATIONS**
 
 This
        Quarterly Report on Form 10-Q 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-Q, including under “Risk Factors.” You should
        read the following discussion and analysis together with our unaudited 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, 2007 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 Bank of America (formerly
        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
        compliments our Mangomind SM 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 Bank of America (formerly
        FleetBoston) for the internal use of fileTRUST SM by Bank
        of America (formerly FleetBoston), which expired in February 2004. The terms
        and
        conditions of this agreement provided for automatic renewals on a month-to-month
        basis.
 
 **Critical
        Accounting Policies**
 
 Our
        accounting policies are fully described in Note 2 in the Company’s Annual Report
        on Form 10-KSB for the period ended December 31, 2007, as filed on March
        30,
        2008. The following describes the application of accounting principles that
        have
        significant impact on our unaudited consolidated financial
        statements:
 
 *Going
        Concern Assumption* –
        The unaudited
        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 unaudited 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.
  9
 
 *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.
 
 *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.
 
 *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
        March 31, 2008, there were no full time employees performing engineering
        or
        development on our products and services. 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 March 31, 2008,
        there
        were no full time employees performing selling and marketing activities.
        Our
        remaining employee is 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 March 31, 2008,
        we had
        one employee, working in a general and administrative capacity.
  10
 
 **Results
        of Operations**–**Three Months Ended March 31, 2008 and
        2007**
 
 Revenues
        for the three months ended March 31, 2008 increased $3,676 or 5.9% to $65,607
        from $61,931 for the comparable period in 2007. No customer accounted for
        more
        than 10% of our revenues for either period.
 
 We
        recognized $62,552 from the sale of our Mangomind SM service
        and $3,055 from the sale of our fileTRUST SM service
        during the three months ended March 31, 2008. During the comparable period
        in
        2007, we recognized $59,063 from the sale of the Mangomind SM service
        and $2,868 from the sale of our fileTRUST SM service.
  Cost
        of
        services for the three months ended March 31, 2008 increased $859 or 1.3%
        to
        $65,601 compared to $64,742 for the comparable period in 2007. The decrease
        in
        the cost of delivering our services was primarily a result of our continued
        reductions and our switch to a lower cost data center. In response to our
        loss
        of Bank of America (formerly FleetBoston) as a customer, we have instituted
        cost
        reductions to lessen the adverse effects of the loss of the Bank of America
        (formerly FleetBoston) revenues, including restructuring our business
        relationships with key vendors such as Built Right Networks.
 
 For
        the
        three months ended March 31, 2008, other operating expenses including selling
        and marketing and general and administrative expenses increased $162,344
        or 136%
        to $281,642 compared with $119,298 for the comparable period in 2007. The
        increase in other operating expenses was due primarily to legal costs incurred
        in pursuit of patents and in defense of our patents combined with a reduction
        of
        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 months
        ended March 31, 2008 and 2007, our one (1) full-time employee was working
        in a
        general and administrative capacity.
 
 Our
        loss
        from operations increased $159,527 to $281,636 for the three months ended
        March
        31, 2008 compared with a loss from operations of $122,109 for the comparable
        period in 2007 as a result of the above factors.
 
 Interest
        income decreased $4,864 to $4,271 for the three months ended March 31, 2008
        compared to $9,135 for the comparable period in 2007 due to the availability
        of
        working capital.
  **Financial
        Condition, Liquidity and Capital Resources**
 
 We
        were
        formed in June 1995 and, since our formation, have raised approximately
        $76,449,000 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 upon loans from stockholders and directors and credit
        from suppliers to meet interim financing needs. Borrowings from stockholders
        and
        directors have generally been refinanced with new debt instruments or converted
        into additional equity. At March 31, 2008, approximately $187,000 in additional
        financing was provided through accounts payable, accrued expenses and other
        trade credit.
  11
  On
        January 10, 2007, the Company completed the sale of an aggregate of 2,400,000
        shares of common stock, par value $.001 per share to a group of investors
        led by
        current stockholders. Through the private placement of its common stock,
        the
        Company raised aggregate gross proceeds of $1,200,000. One of the investors
        in
        the offering provided bridge financing to the Company on September 20, 2007
        in
        the principal amount of $250,000. This principal amount and accrued interest
        of
        $6,463 was automatically converted into a subscription for Common Stock pursuant
        to the offering. The Company intends to utilize the net proceeds of the private
        placement to pay past due expenses and to fund its various patent
        litigations
 
 The
        Company received gross proceeds of approximately $1,023,672 through the issuance
        of common stock pursuant to a rights offering and as a consequence issued,
        completed on or about February 19, 2008, approximately 2,047,344 shares of
        its
        common stock to stockholders who properly exercised their rights in the rights
        offering. Pursuant to the rights offering, which concluded as of the close
        of
        business on February 19, 2008, stockholders of record at the close of business
        on December 21, 2007, received, at no charge, a 0.7032 non-transferable right
        for each share of common stock owned by such stockholder on the record date.
        Each full right entitled the holder to purchase one share of the Company’s
        common stock at a purchase price of $0.50 per share.
 
 At
        March
        31, 2008, we had a cash balance of $1,102,481 and working capital of
        approximately $921,000. We do not have any commercial commitments or off
        balance
        sheet financing. Our commitments are described in Note 9 in the Company’s Annual
        Report on Form 10-KSB for the period ended December 31, 2007, as filed on
        March
        30, 2008.
 
 We
        did
        not make any capital expenditures during the three months ended March 31,
        2008.
 
 We
        have
        significantly modified our operations and reduced our work force on four
        separate occasions since April 2001. We currently have one (1) employee,
        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 $21,000
        per month, under an agreement, which can be cancelled with a ninety (90)
        day
        notice.
 
 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 consolidated financial statements, during the three months
        ended March 31, 2008 and 2007, we incurred a net loss of $277,365 and $112,974,
        respectively. Cash used in operations during the three months ended March
        31,
        2008 and 2007 was $239,130 and $144,149, 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.
 
 **OFF-BALANCE
        SHEET ARRANGEMENTS**
 
 We
        do not
        have any commercial commitments or off-balance sheet financing. Our commitments
        are described in Note 9 to our consolidated financial statements filed on
        Form
        10-KSB for the period ended December 31, 2007, as reported to the Securities
        and
        Exchange Commission.
  12
 
 **ITEM
        3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
        RISK**
 
 The
        accompanying unaudited consolidated financial statements include estimated
        fair
        value information as of March 31, 2008 as required by SFAS No. 107, “Disclosure
        About Fair Value of Financial Instruments”. Disclosure of the estimated fair
        values of financial instruments often requires the use of estimates. The
        Company
        uses the following methods and assumptions to estimate the fair value of
        financial instruments.
 
 **CASH**
 
 The
        carrying amounts approximate fair market value at March 31, 2008.
 
 **ITEM
        4. CONTROLS AND PROCEDURES**
 
 We
        have
        significantly reduced our work force on several occasions during 2001 and
        2002.
        At March 31, 2007 and 2008, we had one (1) employee, 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 Annual Report on
        Form 10-KSB. 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 March 31, 2008 that has materially affected, or is
        reasonably likely to materially affect, our internal control over financial
        reporting.
  13
 
 **PART
        II**–**OTHER INFORMATION**
 
 **ITEM
        1. LEGAL PROCEEDINGS**
 
 On
        November 22, 2002, the Company 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. The complaint seeks
        unspecified monetary damages and injunctive relief and awards for interest,
        costs and attorneys’ fees.
 
 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
        2, 2003, the Company 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. The complaint seeks
        unspecified monetary damages and injunctive relief and awards for interest,
        costs and attorneys’ fees.
  On
        March
        14, 2006, the U,S., District Court in New Hampshire ruled in favor of Oracle’s
        motion for summary judgment that did it did not infringe U.S. Patent No.
        6,148,377 held by Mangosoft, Inc. Mangosoft had sued Oracle in 2002, claiming
        infringement of its patent on shared memory technology as described above.
 
 On
        September 22, 2006, the Company through its subsidiary Mangosoft Intellectual
        Property, Inc., filed a civil action in the United States District Court
        for the
        Eastern District of Texas alleging patent infringement against eBay, Inc.
        of San
        Jose and its subsidiaries Skype Technologies SA and Skype Software Sarl of
        Luxembourg. The Complaint alleges that each of the defendants have infringed,
        and continue to infringe, U.S. Patent No. 6,647,393 entitled "Dynamic Directory
        Service" in violation of one or more provisions of 35 U.S.C. section 271.
        The
        complaint seeks damages for willful infringement as well as injunctive relief.
 
 On
        October 26, 2006 Mangosoft Inc. was successful in its motion for summary
        judgment of non-infringement of United States Patent No. 6,371,790 in an
        action
        brought by Oracle International Corp. Oracle's motion for summary adjudication
        of patent validity, along with Mangosoft's motion to amend its final contentions
        of patent invalidity, and Oracle's motion to preclude Mangosoft from asserting
        a
        defense of inequitable conduct were denied by the United States District
        Chief
        Judge.
 
 On
        March
        29, 2007 the Company filed a Notice of Appeal in the United States District
        Court for the District of New Hampshire in the case of Mangosoft,
        Inc., et al. v. Oracle Corporation ,
        C.A.
        No. 02-545-M. By filing the Notice of Appeal, Mangosoft has commenced an
        appeal
        in the United States Court of Appeals for the Federal Circuit challenging,
        among
        other things, the District Court’s claim construction Order of September 21,
        2004, the District Court’s order granting defendant Oracle Corporation’s motion
        for summary judgment of non-infringement entered on March 14, 2006, and the
        District Court’s entry of final judgment entered on March 29, 2007.
 
 Other
        than the matters 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.
  14
 
 **ITEM
        1a.**–**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
        $90,010,846 as of March 31, 2008. For the three months ended March 31, 2008,
        our
        loss from operations was $277,365. For the year ended December 31, 2007 our
        loss
        from operations was $112,974. 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
        Will 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.
 
 *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
        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, are subject
        to
        substantial competition or react negatively to Bank of America’s (formerly
        FleetBoston) termination of its February 2002 enterprise license agreement
        with
        us, our business, financial condition and results of operations will be
        materially and 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.
  15
 
 *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.
 
 *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.
 
 *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.
  *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.
  16
 
 *We
        Have Limitations On The Effectiveness Of Our Internal
        Controls.*
 
 We
        have
        one full-time employee. This employee is engaged in general and administrative
        capacities. 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 systems, no evaluation of controls can provide absolute assurance
        that
        all control issues, if any, within the organization have been
        detected.
  17
 
 **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, as amended on July 25, 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.
  18
 
 **(b)
        Reports on Form 8-K:**
 
 (1)
              On
                  January 22, 2008, Form 8-K was filed indicating that its Board
                  of
                  Directors has extended the expiration date of its previously announced
                  rights offering from January 29, 2008 to February 18,
                  2008.
 
 (2)
              On
                  January 29, 2008, Form 8-K was filed indicating that its Board
                  of
                  Directors has extended the expiration date of its previously announced
                  rights offering from February 18, 2008 to February 19,
                  2008.
 
 (3)
              On
                  February 27, 2008, Form 8-K was filed indicating the closing and
                  the
                  results of its rights offering which ended as of the close of business
                  on
                  February 19, 2008. The Company received gross proceeds of approximately
                  $1,023,672 and will issue approximately 2,047,344 shares of its
                  common
                  stock to its stockholders who properly exercised their rights in
                  the
                  rights offering. The Company expects to commence issuing the shares
                  of
                  common stock on or about February 27,
                  2008.
  19
 
 **SIGNATURE**
 
 In
        accordance with 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.
 
 May
                  15, 2008
              MANGOSOFT,
                  INC./S/*Dale
                  Vincent*Dale
                  Vincent
                Chief
                  Executive Officer
                (Principal
                  Financial and AccountingOfficer)
  20